So, your business has a Legal Entity Identifier (LEI) number now. You likely got it for a specific reason: a regulatory mandate from the RBI or SEBI, a necessary step for a financial transaction, or perhaps a key client required it as part of their due diligence. Many businesses treat obtaining an LEI code as a one-and-done task. The number is active, the box is checked, and it’s forgotten. This view misses the most significant, long-term benefits of the LEI system. The real value isn’t
just in obtaining the LEI, but in the strategic advantage of keeping it active. Letting it lapse is a missed business opportunity and can create unforeseen risks.
But here’s a critical detail we always emphasize: the Global LEI System (GLEIS) is designed so that your LEI only remains active for one year. One year from your registration date, your LEI will automatically lapse in the global database. This annual renewal is mandatory to ensure the data remains accurate. What many see as a one-time task is, in fact, an annual responsibility.
A Simple Solution to Stay Active: Let Us Handle It for You
We understand that remembering to renew annually is another task on a long to-do list. That’s why we created a solution to remove this burden from your shoulders.
At LEI International Pvt. Ltd. (India’s First privately accredited LEI Issuer by GLIEF), we offer multi-year renewal plans for two, three and five years. This approach is simpler and can save you close to 20% on the annual renewal rate. When you sign up for our multi-year plan, we take on the responsibility of renewing your LEI ahead of the deadline each year. Your LEI will either renew automatically in our system, or, if your company data has changed, we’ll reach out
to you to gather the required documents and take care of everything. This ensures your LEI status remains active without fail, allowing you to focus on your core business.
Beyond Compliance: The Strategic Value of an Active LEI
For a small annual cost, renewing your LEI is a powerful investment in your company’s operational integrity and reputation. It helps Build Instant Trust & Streamline Decisions as an active LEI acts as a global seal of verification for your business. It gives clients, partners, and lenders instant trust and credibility. When they see your status is “Active,” their Know Your Customer (KYC) and due diligence processes become faster and easier. This removes friction from the decision-making process, making it simpler for them to choose to do business with you.
It also Ensures Smoother Operations & Averts Risk, we know that oftentimes Business opportunities and transactions are time-sensitive. An active LEI ensures you are always ready. You won’t have to scramble when a crucial international payment needs processing or a new credit line is sanctioned. This state of readiness prevents costly delays and helps you avoid potential “rush fees” for urgent renewals. It’s a simple way to de-risk your financial operations.
It is also a step towards Future-Proofing Your Business as we all know that the business environment is volatile, and regulatory requirements are only increasing. A standard that is optional today could become mandatory tomorrow. By maintaining your LEI, you position your business to be ahead of the curve, ready to adapt to new rules without disrupting your operations.
The Silent Message a Lapsed LEI Sends to Your Clients
A lapsed LEI is more than just an expired code; it’s a reflection of your business practices that is visible to the world. It can be a Signal of Lack of Professionalism as well. A lapsed status can suggest that your company may not be diligent with its compliance and governance. It’s a small detail, but it can make partners wonder what other important things might be overlooked.
When a client sees a lapsed LEI, they see information that is unverified and potentially outdated. This forces them to conduct extra due diligence, creating friction and skepticism at the very start of a potential relationship leading to unnecessary doubts. As you appear as a High-Risk Partner in a competitive environment, clients gravitate toward partners who are transparent, reliable, and low-risk. A lapsed LEI can make your business appear less clean and more risky than a competitor whose credentials are fully active and verified. It could be the simple factor that causes them to pivot to someone else.
The Non-Negotiable Mandate in India
For entities in India, this isn’t just a matter of best practice. The Reserve Bank of India (RBI) has made the LEI mandatory for all borrowing entities with a total credit exposure of ₹5 crore and above. This applies to both MSMEs and large conglomerates. A lapsed LEI can directly complicate or delay the renewal and disbursal of business loans. Similarly, SEBI requires it for various capital market transactions.
For MSMEs: Your LEI is a VIP Pass, Not Just a Number
It’s a common misconception that the LEI is only for conglomerates dealing internationally. The benefits for a small or medium-sized business are just as powerful. Forget seeing it as a boring compliance task. An active LEI offers distinct advantages.
You know how a blue tick on Instagram or Twitter shows an account is authentic? An active LEI does exactly that for your business on a global scale. It’s an investment in status and recognition that helps you build a premium brand identity and makes your small business look bigger. An active LEI can be the tie-breaker that helps you win more business. It shows you understand international standards and are a serious, professional player. It’s a VIP pass for your business on the global stage, you never want it to expire.
The point is clear: the small annual effort to renew your LEI is one of the smartest investments you can make. You aren’t just performing a compliance task; you are investing in trust, operational smoothness, and a professional reputation. You are keeping the doors to both domestic and global opportunities wide open.