Renew your LEI: Why it’s essential
Renewing your Legal Entity Identifier (LEI) annually is mandatory for businesses in India, especially those involved in banking, securities, and cross-border financial transactions. If you fail to renew your LEI, it will change from “ISSUED” to “LAPSED” in the Global Legal Entity Identifier Foundation (GLEIF) database. Once this happens, your transaction approvals may be delayed, or financial institutions may refuse to process them.
A lapsed LEI code affects entities engaging in loan applications, cross-border transactions, futures trading, and compliance reporting.
Why Indian businesses must keep their LEI active
Maintaining an active LEI can impact financial transactions, investments, and compliance with Indian regulatory bodies like the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).
1. ‘No LEI, No Trade’ – Enforced by Indian Banks & NBFCs
- The RBI mandates LEI registration for borrowers with total exposure above ₹5 crore.
- Many banks, Non-Banking Financial Companies (NBFCs), and financial institutions in India follow the “No LEI, No Trade” policy.
- Without an active LEI, businesses may face loan processing delays or rejection.
2. Required for RBI & SEBI compliance
- The Reserve Bank of India (RBI) mandates LEI for cross-border transactions and derivative contracts.
- SEBI requires LEI for large corporate borrowers, mutual fund investments, and securities trading.
- Failing to renew on time can result in transaction rejections, penalties, and regulatory scrutiny.
3. Faster loan & investment approvals
A lapsed LEI can delay business loans, project financing, and foreign investments.
PSU and private banks in India verify LEI status before approving loans.
Consequences of a lapsed LEI
A lapsed LEI can lead to serious legal and financial risks.
Regulatory fines: In the past, the Commodity Futures Trading Commission (CFTC) fined companies like Morgan Stanley USD 5 million for failing to maintain accurate swap reports due to lapsed LEIs.
Delayed transactions: Banks and financial institutions may reject or delay transactions, making it difficult to secure loans, investments, or international trade deals.
Non-convenience fees: Many financial service providers charge additional fees if an entity fails to renew its LEI on time.
How to prevent your LEI from lapsing
Your LEI code is valid for 12 months from the date of issuance. To prevent it from lapsing, follow these steps:
- Apply for renewal within 60 days before expiration.
- Do not wait until the last minute, as processing might take some time.
- If you renew before the 60-day window but are already a client of LEI Register, your next renewal date will retain the same day and month as the last renewal date, with only the year updating accordingly.
You can check your LEI status and apply for renewal here.
Renew your LEI code with LEIKart
Renewing your LEI code with LEIKart is quick, easy, and cost-effective.
How to renew with LEIKart
- Visit www.leikart.com and select LEI renewal.
- Enter your LEI code or company name.
- Fill in the required business details.
- Accept the terms and conditions, then confirm and continue.
- Choose your renewal plan (1-year, 3-year, or 5-year).
- Enter your GST Number for invoicing, select your preferred payment method (UPI, bank transfer, NEFT, net banking, or card), and proceed.
- Relax and wait for the confirmation email. You can track your LEI status online.
Key takeaways
✔ LEI renewal is required every year.
✔ If not renewed, your status will change to “LAPSED,” affecting transactions.
✔ Many businesses enforce a ‘No LEI, No Trade’ policy.
✔ Lapsed LEIs can lead to regulatory fines and delayed financial transactions.
✔ You can renew your LEI up to 60 days before expiration.
✔ LEIKart offers cost-effective renewal services with Multiyear renewal options.
✔ You can switch your LEI provider anytime.
