Firms will have to quote the 20-digit legal entity identifier (LEI) number for undertaking cross-border transactions of Rs 50 crore or more from October 1, 2022, the Reserve Bank said on Friday.

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LEI is a 20-digit number used to uniquely identify parties to financial transactions worldwide to improve the quality and accuracy of financial data systems.

LEI has been introduced by the RBI in a phased manner for participants in the over the counter (OTC) derivative, non-derivative markets, large corporate borrowers and large value transactions in centralised payment systems.

"In order to further harness the benefits of LEI, it has been decided that AD Category I banks, with effect from October 1, 2022, shall obtain the LEI number from the resident entities (non-individuals) undertaking capital or current account transactions of Rs 50 crore and above (per transaction) under FEMA, 1999," RBI said in a circular.

As regards non-resident counterparts/ overseas entities, in case of non-availability of LEI information, banks may process the transactions to avoid disruptions, it added.

RBI also said banks may encourage concerned entities to voluntarily furnish LEI while undertaking transactions even before October 1, 2022.

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"Once an entity has obtained an LEI number, it must be reported in all transactions of that entity, irrespective of transaction size," it added.

Banks have been asked to put in place the required systems to capture the LEI information and ensure that it is validated against the global LEI database available on the website of the Global Legal Entity Identifier Foundation (GLEIF).

Entities can obtain LEI from any of the Local Operating Units (LOUs) accredited by the GLEIF, the body tasked to support the implementation and use of LEI.

In India, LEI can be obtained from Legal Entity Identifier India Ltd (LEIL), which is also recognised as an issuer of LEI by the Reserve Bank under the Payment and Settlement Systems Act, 2007.