MUMBAI, October 20 — The Reserve Bank of India (RBI) issued an enforcement circular on Monday making the 20-digit Legal Entity Identifier (LEI) mandatory for all high-value transactions of ₹50 Crore and above executed through NEFT and RTGS systems.
Under the notified mandate, member banks must capture verified LEI codes for both remitting entities and beneficiary corporate accounts for all inter-bank fund transfers originating from commercial companies, partnerships, trusts, and public sector undertakings. Transactions lacking valid or active LEI credentials will be systematically rejected by clearing gateways to eliminate entity misidentification.
The central bank emphasized that universal adoption of LEI—conceived by the G20 Financial Stability Board (FSB) following the 2008 global financial crisis—provides indelible corporate traceability, preventing systemic loan round-tripping and aiding anti-money laundering (AML) monitoring across cross-border balance sheets.
The institutional framework of the Legal Entity Identifier (administered domestically by Legal Entity Identifier India Ltd - LEIL, a subsidiary of CCIL), operational distinctions between RTGS (gross settlement) and NEFT (net batch settlement), and systemic risk management under the Payment and Settlement Systems Act 2007 are key syllabus topics in RBI Grade B and UPSC GS-III.