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What’s New:

Is Legal Entity Identifier registration compulsory?

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‍LEI (Legal Entity Identifier) is a standard that is used to uniquely identify legal entities such as corporations, trusts, partnerships, and foundations. LEI has become an industry standard to facilitate the more efficient identification of legal entities in financial transactions. While LEI registration is not compulsory, it is mandatory for several financial transactions. 

Keep reading to find out whether LEI registration is compulsory for your business, what are the benefits of having an LEI and how to obtain one. 

List of LEI regulations in India

Indian LEI regulations are as follows (latest first)

Date of regulation passed Regulation passed for Description  Download Link
21 April 2022 LEI code for borrowers RBI has advised that non-individual borrowers enjoying aggregate exposure of ₹5 crores and above from banks and financial institutions (FIs) shall be required to obtain LEI codes as per the given timeline. Click here
10 December 2021 Introduction of LEI for Cross-border Transactions  RBI has advised that the cross-border transactions for capital or current account with ₹50 crores and above must obtain LEI number before 1 October 2022,  Click here
5 January 2021 Introduction of LEI for Large Value Transactions in Centralised Payment Systems RBI decided to introduce the LEI system for all payment transactions of value ₹50 crores and above undertaken by entities (non-individuals) using Reserve Bank-run Centralised Payment Systems, viz. Real-Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT). Click here
5 June 2020 Insurance Regulatory and Development Authority of India The Insurance Regulatory and Development Authority of India (IRDAI) made it mandatory for borrowers to have an LEI code. Click here
27 March 2020 Legal Entity Identifier: Extension of deadline Due to covid19, RBI extended the deadline to obtain an LEI code. Click here
9 October 2018 Security and Exchange Board Security and Exchange Board of India passed a regulation making LEI code mandatory. Click here
2 November 2017 Introduction of LEI for large corporate borrowers RBI decided that the banks shall advise their existing large corporate borrowers having total exposures of ₹ 50 crores and above to obtain LEI as per the schedule given in the annex. Click here
1 June 2017 Introduction of Legal Entity Identifier for OTC derivatives markets RBI decided to implement the LEI system for all participants in the Over-the-Counter (OTC) markets for Rupee Interest Rate derivatives, foreign currency derivatives, and credit derivatives in India. Click here

What problems does the LEI help to solve?

LEI is a unique reference number that identifies your company. It can identify your company in any financial transactions such as trade finance and finance leasing.

Using an LEI to identify your company can help solve a significant number of problems that are often encountered while conducting business transactions.

Some of these common problems include:

  • Inability to verify the identity of the counterparty
  • Failure to understand the creditworthiness of the counterparty
  • Inability to know the financial strength of the counterpart
  • Inability to settle disputes

Where can I get a Legal Entity Identifier?

There are several service providers offering LEI services in India. It is advisable to choose a reliable LEI vendor when obtaining an LEI. You can obtain an LEI from LEI Kart, one of the fastest service providers providing free LEI certificates. 

Register an LEI with LEI Kart

LEI Kart is an LEI registration platform that enables a simple and quick way to register your company’s LEI. It provides new registration, renewal, and transfer.

You can find the steps to register an LEI with LEI Kart here.

According to the guidelines by RBI, any legal entity having exposure of Rs. 50 crore and above must have an LEI number. However, RBI has passed timelines to obtain an LEI by the borrowers, which you can find here.

What’s New:

What is an LEI?

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A Legal Entity Identifier (LEI) is a unique 20-character alphanumeric code used to identify legal entities that wish to partake in financial transactions in the international market. The LEI code is based on the ISO 17442 standard developed by the International Organisation for Standardisation (ISO).

This identifier enhances the quality and accuracy of financial data systems for better risk management.

The legal entity’s LEI will be publicly available on a standardized database and contain information about the company’s registered and trading names, company type, registered address, registration number, parent company information, and child entity information. 

Why was LEI created?

After the Global Financial Crisis in 2008, the authority needed something that could help keep an eye on financial transactions, confirm details of every corporation making global trades, and calculate the market risk.

This is when the Group of Twenty (G20) called on the Financial Stability Board (FSB) to recommend the LEI code that came into action in December 2012. They founded the Global Legal Entity Identifier Foundation (GLEIF) in 2014 to govern the whole LEI ecosystem.

LEI was created as a precaution against financial crises that may happen in the future. It is specially designed to make the financial world accurate, transparent, and trustworthy.

What are the benefits of the LEI code for Indian companies?

Likewise, we Indians have our unique identification numbers as Aadhar cards; your company should also have a unique identification number, i.e., LEI code. The benefits of the LEI code for Indian companies are as below:

  •       LEI code verifies the company is registered legally and actively working
  •       Makes cross-border transactions easy
  •       Boosts credibility not only within India but worldwide
  •       Helps to identify the relationship structure of the parent company and child company
  •       LEI code helps the loan approval process faster

Get your LEI code now

Who needs an LEI code in India?

All legal entities that take part in financial transactions on a global scale need an LEI code. In India, RBI introduced LEI first through the guidelines issued in June 2017 for participants in the OTC derivatives market. In November, RBI extended LEI for large corporate borrowers. In June 2020, the Insurance Regulatory and Development Authority of India issued a circular for insurers to obtain LEI. Since then, RBI has regulated multiple guidelines regarding the LEI code. There are more than 90,000 companies, including NGOs, Trusts, and Societies, that have an active LEI code in India. Read more here.

How to register for an LEI code?

Registering for an LEI code is simple. Whether it’s a new registration, renewal, or you wish to transfer your existing LEI – simply visit LEI Kart and apply for it in just two minutes. LEI Kart makes obtaining LEI code cost-effective, fast and worthy.

Latest RBI guidelines for obtaining an LEI code in India.

Since 2017, RBI has passed multiple guidelines regarding LEI numbers. The latest guidelines were passed on 21st April 2022, where it is mentioned that the companies with a total exposure of Rs. 5 crores will also have to obtain the code in the coming future. You’ll find the timeline to obtain an LEI code by borrowers as per RBI below.

Total ExposureLEI to be obtained on or before
Above ₹25 crore30 April 2023
Above ₹10 crore, up to ₹25 crore30 April 2024
₹5 crore and above, up to ₹10 crore30 April 2025

 

What’s New:

vLEI

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The Global LEI System is one of a kind in its capacity to provide regulated and standardized global identities for legal entities around the world. The Global Legal Entity Foundation (GLEIF) that governs the LEI will now also become the gatekeeper of the new decentralized vLEI system, the vLEI Ecosystem Governance Framework 2022

On 29 June 2022, GLEIF posted a press release on its official website about the measures to be taken to solve all the digital identity problems. Talking about the uses and benefits of LEI and vLEI.


What is vLEI?

Using the vLEI will allow everyone to confirm ownership structures and authorized representations in many digital business activities (everyone with an LEI code). Some examples of known use cases include approving business transactions and contracts, onboarding customers, transacting within import/export and supply chain business networks, and submitting regulatory filings and reports.

GLEIF has mentioned the vLEI trust chain as follows:

GLEIF vlei steps
  • GLEIF is the root of trust.
  • GLEIF will establish a trusted network of Qualified vLEI Issuers (QVIs).
  • QVI-s are qualified to issue Entity and Role Credentials:
    • to Legal Entities
    • to Persons who represent Legal Entities either in official or functional roles. Source: GLEIF

By combining three concepts, i.e., the company’s name represented by LEI, the responsible person represented by the legal entity, and the role played by the person of the legal entity, vLEI can be issued and become a part of the company’s digital identity.


vLEI will add additional authenticity, credibility, and value to the legal entity.

What’s New:

How to obtain an LEI number?

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The Legal Entity Identifier (LEI) code improves the quality and accuracy of financial data systems for better risk management. The 20-digit unique code helps to identify parties of financial transactions worldwide.

Obtaining an LEI code is very plain and simple.
With LEI Kart, you can apply for an LEI code in just 2 minutes. 

Who needs the LEI code in India? 

As per Reserve Bank of India (RBI) guidelines, all legal entities, including Private Limited, LLP, Partnership, and Proprietorship, with a total exposure of Rs. 50 crore and above must have an LEI code. By the end of 2025, it will also be mandatory for entities having Rs. 5 crores and above exposure to obtain LEI code according to the timeline provided by RBI.

Who issues the LEI code?

In 2011, the Group of Twenty (G20) called on the Financial Stability Board (FSB) to provide recommendations on Legal Entity Identifier (LEI) and a supporting governance structure which came into action at the end of 2012. Later in 2014, they formed a not-for-profit organization named Global Legal Entity Identifier Foundation (GLEIF) to govern LEI. Then, GLEIF gave the authority to the Local Operation Unit (LOU) to issue LEI numbers. Later, GLEIF introduced Registration Agents (RA) to help the legal entity register an LEI code in collaboration with LOU-s. 

Therefore, LOU-s are the ones who issue LEI codes, and RA-s are the ones who assist clients with the registration process. LEI Kart is an authorized RA in partnership with RapidLEI (LOU).

How to obtain an LEI code?

The LEI number can be obtained by following the steps below.

  • Type www.leikart.com in your device (laptop/ mobile/ desktop/ tablet).
  • Click on ‘LEI Registration’ at the top of the page.
  • Click ‘Apply for a new LEI number’.
  • Fill in your company/ firm name, director/ partner’s full name, registration ID (GSTIN/ CIN/ IEC/ UAN), valid email and your phone number. 
  • From there, you’ll need to pick whether the registered address is the same as your office address or not. Fill in your address if ‘yes’, if ‘no’, then you have to fill in both the headquarters and office address. Remember you have to fill in the address according to your GST. 
  • On the next page, you will have to confirm if your company is owned by another company or not (> 50%). If ‘yes’ fill in your parent entity’s details, if ‘no’ proceed with the application.
  • Upload the supporting documents of your company.
  • Accept the terms and conditions and click ‘Confirm and Continue`.
  • Choose your renewal plan; LEI Kart provides a multi-year renewal plan, i.e., one year, three years, and five years. 
  • Add ‘LEI Certificate’, you can have only a pdf LEI certificate or a hard copy and pdf both. Remember, the LEI certificate is totally optional, you can still have it for yourself.
  • Lastly, Insert your GST number for the invoice, choose the method of payment and proceed. LEI Kart accepts any kind of payment like UPI, bank transfer, NEFT, net banking, and card payment.

Sit back and wait up to a few hours for the confirmation of your LEI number.
You can track your order by clicking here.

Why should you get an LEI code in India?

As RBI has already circulated multiple guidelines regarding the LEI number, making it mandatory for the legal entities to obtain it. Apart from the notifications by RBI, let us tell you the reasons why you should get an LEI number in India. 

  1. An LEI number identifies you throughout the globe.
  2. The LEI is an essential identifier to enable cross-border transactions.
  3. Both humans and machines can verify LEI. 
  4. It boosts credibility not only within India but worldwide.
  5. It can be used for hedging, forward-booking, auction-booking, and more.

What’s New:

Who needs an LEI number in India?

Posted on

All legal entities that take part in financial transactions on a global scale need a Legal Entity Identifier(LEI) number. Before the LEI initiative, which took place in 2011, it was impossible for any authority to check public information about a company, furthermore from one platform. This can also be blamed to be one of the reasons behind the Financial Crisis of 2008.

In 2011, the Group of Twenty (G20) called on the Financial Stability Board (FSB) to provide recommendations on Legal Entity Identifier (LEI) and a supporting governance structure which came into action by the end of 2012.

In India, RBI introduced LEI first through the guidelines issued in June 2017 for participants in the OTC derivatives market. In November, RBI extended LEI for large corporate borrowers. In June 2020, the Insurance Regulatory and Development Authority of India issued a circular for insurers to obtain LEI. Since then, RBI has regulated multiple guidelines regarding the LEI code. There are more than 90,000 companies, including NGOs, Trusts, and Societies, that have an active LEI code in India.

As clearly mentioned, it is the legal entities that need an LEI code, no individual is required to obtain an LEI code. Read more to know about who needs an LEI code in India.

Definition of Legal Entity Identifier(LEI) code

Before knowing who needs the LEI code, it is necessary to know what the LEI code is. LEI code is a key measure to improve the quality and accuracy of financial data systems for better risk management that came into action after the Global Financial Crisis. It verifies ‘who is who’ and “‘who owns whom’.” The LEI code is a 20-digit alphanumeric unique identity code allocated to legal entities participating in financial transactions.

Benefits of Legal Entity Identifier(LEI) code

  • LEI code verifies that the company is registered legally and actively working
  • LEI code helps entities to step into financial transactions with other entities
  • It boosts credibility not only within India but worldwide
  • LEI code helps to identify the investment firm that is executing the transaction
  • LEI is making financial data more accurate and transparent, and in addition, it is cost-effective.
    To register your company’s LEI code, click here.

LEI number for a legal entity

Legal Entity Identifier number is now mandatory for different types of entities, including Private Limited, Public Limited, LLP, Partnership, and Proprietorship, whose total exposure is more than ₹50 crore as per the guidelines regulated by RBI.

LEI number for an organization

Whether it be NGO, Trust or Society, if you have an exposure of ₹5 crore and above, you need to have an LEI code. As per RBI guidelines, it will be mandatory for all entities and organizations to have a Legal Entity Identifier number if they have a total exposure of ₹5 crore and above.
You can register for the LEI code at LEI Kart

LEI number for financial institutions

RBI made it mandatory for all financial institutions to obtain an LEI code, including commercial banks, central banks, investment companies, mortgage firms, credit unions, and more. 

Combination of LEI numbers

The Legal Entity Identifier(LEI) is a 20-digit unique alphanumeric code where the first four digits are dedicated to identifying the Local Operating Unit (LOU) that issues LEI numbers. The fifth to eighteenth are combinations of letters and numbers that are dedicated to the unique identifier for the entity and the last two digits are for verification purposes.