In an increasingly regulated environment, the Legal Entity Identifier (LEI) is no longer optional in India, it’s a compliance necessity. Both the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have issued precise mandates, complete with timelines and thresholds. Here’s a simplified yet detailed breakdown of what those requirements are and why your business must act.
RBI’s Mandates: Clear Exposure-Based Timelines
The RBI has mandated that non-individual borrowers with an aggregate exposure of ₹5 crore and above from banks or financial institutions must obtain an LEI. This exposure covers both fund-based and non-fund-based credit from entities like scheduled commercial banks, NBFCs, small finance banks, urban co-operatives, and institutions like EXIM Bank, SIDBI, NABARD, and NHB
To manage phased compliance, the RBI set a clear timeline:
● Borrowers with over ₹25 crore exposure were required to obtain an LEI by April 30, 2023.
● Borrowers with above ₹10 crore and up to ₹25 crore exposure had until April 30,2024.
● Those with ₹5 crore to ₹10 crore exposure must register for LEI by April 30, 2025
Entities that don’t comply risk having no new credit sanctioned, or no renewal or enhancement of existing loans. Separately, the RBI also mandated that all single-payment transactions of ₹50 crore or more via NEFT or RTGS must include the LEI of both remitter and beneficiary (if non-individuals), regardless of whether they are domestic or government undertakings. Additionally, for cross-border transactions under FEMA of ₹50 crore or above, Authorized Dealers (AD Category I banks) must record and report LEI details for resident entities, with this being effective from October 1, 2022.
SEBI’s Mandates: Targeted Transparency in Capital Markets
On July 27, 2023, SEBI issued a circular mandating that all non-individual Foreign Portfolio Investors (FPIs) must provide LEI details. This requirement applies at registration, renewal, and in ongoing KYC processes. Existing FPIs were given 180 days to comply, and accounts would be blocked for purchase activity if LEI remained unprovided or inactive. Moreover, SEBI mandated that entities issuing or managing non-convertible securities, securitized debt instruments, or security receipts must obtain an LEI especially for debenture trustees and asset reconstruction companies (ARCs) with a deadline set to September 1, 2023. Additionally, SEBI required companies with outstanding listed instruments as of August 31, 2023, to also hold an LEI.
What This Means for Your Business
If your business falls into any of the following categories, an LEI is no longer optional, it’s mandatory:
● You are a non-individual borrower with credit exposure of ₹5 crore or more and depending on exposure, you must have obtained LEI by the relevant RBI deadline.
● You handle single NEFT/RTGS payments of ₹50 crore or more in any year.
● You engage in cross-border transactions of ₹50 crore or more via AD banks.
● You are a Foreign Portfolio Investor, or involved in issuing or managing regulated capital market instruments.
Failing to comply means potential denied credit, blocked capital-market access, and disrupted operations.
Why Choose TNV LEI for Compliance?
Compliance isn’t just about meeting regulations, it’s about doing so smoothly and confidently. That’s where TNV LEI (LEI International Pvt. Ltd.) stands out.
As India’s first private Local Operating Unit (LOU) directly accredited by GLEIF, TNV LEI issues LEIs without intermediaries, ensuring speedy processing, transparent pricing, and direct global recognition. If you already hold an LEI elsewhere, transferring it to TNV LEI comes with proactive renewal reminders and hassle-free management.
By choosing TNV LEI, you’re not just checking a compliance box, you’re securing a globally trusted identity for your business with the support of a dependable Indian partner.