RBI's new rule will have to be given for the transaction of money in this way, know what is the 20 digit LEI number

RBI's new rule will have to be given for the transaction of money in this way, know what is the 20 digit LEI number

 

New Delhi, 11th December. The Reserve Bank of India has made LEI number or Legal Entity Identifier number mandatory for fund transfer abroad. According to the new RBI rules, companies will have to provide a 20-digit LEI number for transactions of Rs 50 crore or more abroad from October 2022.

In fact, the LEI will ensure the identity of both the parties to the financial transactions. Due to this, RBI has planned to make it mandatory. This 20 digit LEI number will allow financial transactions to be tracked and used to improve the quality and accuracy of financial data systems.

What is LEI Number

RBI has said in its circular that companies based in India will have to obtain LEI number from October 1, 2022, for transactions of Rs 50 crore or more from abroad. RBI has taken this decision under the provisions of FEMA Act 1999. LEI is being implemented in a phased manner. Once a LEI number is issued, companies will be able to mention it in all their transactions. It is mandatory to mention this number.

20 digit number

The LEI is a 20-digit number, called a valid entity identifier or LEI. It is a number to identify both the parties to the financial transaction. This number can be used to identify the parties involved in the transaction. The use of this number helps maintain the quality of financial taking around the world.

Where will it apply

Let us tell you that RBI is implementing it in a phased manner. It is being included in OTC derivatives, non-derivative markets, borrowers of large corporate companies and large transactions to track large transactions. By October 2022, it can be issued for transactions above Rs 50 crore. Companies can be issued this 20 digit number. Once this number is issued, companies will have to mention it in every transaction.