Legal Entity Identifier (LEI) is a global reference number that uniquely identifies every legal entity/ company that is a party to a financial transaction in any jurisdiction.

This is basically required for companies/ organisation that are taking new loans/ funds from financial institutions or for the existing loans and funds availed from financial institutions or banks.

Who can apply for LEI?

Any Bank, Financial institution, Company, Trust, Partnership Firm, Asset Management Companies, Mutual Funds, Holdings, Housing Finance Companies, Insurance Companies, Cooperative societies, /Pension Fund and Alternate Investment (AIF), Derivatives etc who are parties to financial transactions can apply for LEI.

Who shall mandatorily apply for LEI?

All borrowers of banks / financial institutions having total fund based and non-fund-based exposure of INR 5 crore and above shall mandatorily apply for LEI. All the intended borrowers of INR 5 crore and above shall also apply for LEI.

LEI legal framework in India

LEI is issued as per the Payment and Settlement Systems Act 2007 (as amended in 2015) and regulated by Reserve Bank of India (RBI) through the “Issuers”.

The “Issuers” shall also be accredited by the Global Legal Entity Identifier Foundation (GLEIF) as a Local Operation Unit (LOU) for issuance and management of LEI's in India.

LEI is a 20-digit unique code to identify parties to financial transactions worldwide. The structure of the LEI is determined by ISO Standard 17442 and takes into account Financial Stability Board (FSB) stipulations.

Who are Issuers?

The RBI has recognized the following companies as Issuers to issue, renew and manage the LEIs.

1. Legal Entity Identifier India Limited – A Wholly Owned Subsidiary of The Clearing Corporation of India Ltd.
2. LEI Register India Private Limited and some other companies

Consequences of not obtaining LEI

Entities without an LEI code will not to be granted loans, renewal, enhancement of loans, credit facilities.

Use of LEI to Banks and Regulators

The LEI number is useful to the Bank and Financials Institutions to improve the quality and accuracy of financial data systems for better risk management post the Global Financial Crisis.

This LEI number is also useful for the Bank and Financials Institutions to report the risk factors to the repositories.

Checklist for applying LEI

The following documents are required:

1. MCA Registration Certificate containing CIN number, If CIN number is not stated on the certificate, MCA Website Print signed by Company Secretary/Managing Director/Director is to be additionally provided with old MCA certificate.
2. Pan Card issued to the Company
3. Board Resolution to the Authorized persons as per specified format, If further delegation of powers is done by the authorized persons as mentioned in the Board Resolution, a duly notarized power of attorney shall be provided.
4. Audited Financial Statements of the legal entity for the last financial year or link to its website showing its financials.
5. If you have holding company, please provide the following:
6. Audited Consolidated Financial Statements of the direct and/or ultimate parent

or

1. Auditor’s Certificate as per specified format
2. Undertaking cum indemnity as per specified format
3. GST Certificate
4. Shareholding pattern on company’s letterhead if not provided in the Audited Financial Statements
5. If Headquartered (Corporate) Address is different from Registered Address, please provide any one of Website Link or Headquartered Address on Company Letter Head or in Annual Report page where Headquartered address is mentioned.

Note: All the documents shall be certified under seal of the Company by authorized representative or MD or Director as per Board Resolution.

LEI Fee

Different issuers collecting different fees for LEI new application, renewals or port-in potion. Legal Entity Identifier India Limited (LEIL) fee is as follows:

• For New Registration: Rs 4500 + 810 (18% GST) = Rs 5,310 per year

• For Renewal: Rs 3000+ 540 (18% GST) = Rs 3,540 per year

Also read: Monthly, quarterly & annual compliance for startups & private limited companies

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