Economics • Banking & FinanceMedium
In the context of the Indian banking sector, what does 'LEI' stand for, and what is its primary use?
A. Legal Entity Identifier; a 20-character unique code to identify parties to financial transactions globally✓ Correct Answer
B. Liquidity Enhancement Index; used to measure daily bank liquidity buffers
C. Loan Exposure Indicator; calculated for retail lending assessment
D. Limited Equity Instrument; issued during public sector bank divestments
💡 Solution & Explanation
Legal Entity Identifier is a 20-character alphanumeric code established globally to uniquely identify parties involved in financial transactions, mandated by the Reserve Bank of India for large corporate borrowers. It is unrelated to daily bank liquidity buffers or retail lending risk exposure indicators.
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