22 Jun 2021, 12:00 — 5 min read
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.
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.
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 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.
The RBI has recognized the following companies as Issuers to issue, renew and manage the LEIs.
Entities without an LEI code will not to be granted loans, renewal, enhancement of loans, credit facilities.
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.
The following documents are required:
Note: All the documents shall be certified under seal of the Company by authorized representative or MD or Director as per Board Resolution.
Different issuers collecting different fees for LEI new application, renewals or port-in potion. Legal Entity Identifier India Limited (LEIL) fee is as follows:
Also read: Monthly, quarterly & annual compliance for startups & private limited companies
To explore business opportunities, link with me by clicking on the 'Connect' button on my eBiz Card.
Image source: shutterstock.com
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy, or position of GlobalLinker.
Posted byAnil Kumar Ganga
"Ananya legal LLP" is a full service, dynamic, and trustworthy Corporate Advisory and Legal Consultancy Limited Liability Partnership (LLP) Firm that specializes in a...
Process of Trademark Registration in India
21 Apr 2022, 09:09
Registration of NGOs for CSR funds and undertaking CSR activities
13 Apr 2022, 16:38
Most read this week
Please login or register to join the discussion