Context:

Reserve Bank of India (RBI) has decided to introduce the Legal Entity Identifier (LEI) system for all payment transactions of value Rs 50 crore and above undertaken by entities (non-individuals) using the Reserve Bank-run Centralised Payment Systems with effect from April 1.

LEI number

• The Legal Entity Identifier (LEI) is a 20-digit number.
• It is used to uniquely identify parties to financial transactions worldwide while improving the quality and accuracy of financial data systems for better risk management post the global financial crisis.
• LEIL has been recognized by the Reserve Bank of India as an “Issuer” of Legal Entity Identifiers under the Payment and Settlement Systems Act 2007.
• The body that supports the implementation and use of LEI is the Global Legal Entity Identifier Foundation (GLEIF).
• It helps in better risk management, especially in the post-Global Financial Crisis era.