On Thursday, the RBI said corporates securing big loans need to obtain unique code called the legal entity identifier or LEI number from banks else they won't be extended credit. The website of the central bank said, "Borrowers who do not obtain LEI as per the schedule are not to be granted renewal/enhancement of credit facilities".
LEI number, a 20 digit unique identity code shall be used for maintaining credit database with the Central Repository of Information on Large Credits of RBI. As per the RBI norms that came up with LEI number proposal in its October policy, any corporate with an exposure over Rs. 5 crore need to obtain LEI code. This unique code shall facilitate the central bank in assessing the overall borrowing by corporate and also monitor the financial profile of a group.
For a combined exposure of Rs. 1000 crore and more, the corporate is required to secure the LEI code by March 31, 2018; between Rs 500 crore and Rs 1,000 crore by June 2018; between Rs 100 crore and Rs 500 crore by March 31, 2019; and between Rs 50 crore and Rs 100 crore by December 2019.
For exposure less than the specified limit, the RBI will make the announcement separately in respect of the schedule to secure LEI number.