Legal Entity Identifier (LEI) Number: Know Meaning & How to Get it?

Explore a wide range of Working Capital and Business Loan offerings. Open a Current Account now

Home

Services

Products

Help

Get App

Advanced technology has made business transactions possible at large scale involving significant amounts of money. This exposes businesses to significantly higher risks.

The global financial crises of 2007-2008 made it very clear that we needed a transparent system. When a corporation engages in window dressing and hides debts to secure additional funds, it can lead to a disaster. To mitigate such disasters, the Legal Entity Identifier (LEI) system came into existence. The LEI system ensures all financial transactions are transparent and accountable. It plays a central role in building trust and mitigating the risks of large-scale financial activities.

What is a Legal Entity Identifier?

The Legal Entity Identifier (LEI) is a 20-character alpha-numeric code which uniquely identifies global financial transaction participants. The LEI system makes financial data reporting more accurate and helps in effective risk management.

It helps establish a universal reference data system to identify legal entities worldwide involved in financial transactions. Obtained through accredited Local Operating Units (LOUs) under the Global Legal Entity Identifier Foundation (GLEIF), it is a crucial tool for global financial transparency.

In India, Legal Entity Identifier India Ltd. (LEIL) is a recognised issuer by the Reserve Bank of India (RBI) to facilitate the LEI application process. To obtain LEI, please visit LEIL's website (https://www.ccilindia-lei.co.in/) and contribute to the global financial network's accuracy and efficiency.

Structure of the LEI Code

The Legal Entity Identifier code is designed for clarity and simplicity. It avoids embedded intelligence or confusing country codes. Governed by four principles, it is a global standard and assigns a unique identifier to each legal entity. The LEI code is publicly accessible and free for all to use. Consisting of 20 characters, its structure includes:

Characters 1-4: Unique to each Local Operating Unit (LOU) and assigned by the ROC Secretariat.
Characters 5-6: Reserved characters (00).
Characters 7-18: The LOU allocates a 12-character reference to a specific entity based on transparent policies.
Characters 19-20: Two check digits under ISO 17442, enhancing the code's integrity.

Also Read: What is Account Aggregator: A Comprehensive Overview

How One Can Obtain LEI?

1. Access Document List: To initiate the Legal Entity Identifier code acquisition process, visit the online portal at https://www.ccilindia-lei.co.in/ and navigate to the "Downloads" tab. Here, you will find a comprehensive checklist detailing the required documents and their specific formats based on the legal structure of your entity. This step is crucial to ensure you provide all necessary documentation for a smooth application process.

2. Self-Registration: Designate an authorised person to oversee and execute the LEI code acquisition process. This authorised person can be appointed through a resolution, power of attorney, or voluntarily, as per your entity's specific circumstances. This individual is the only one permitted to create an account on the online portal. They will provide their official email ID and proceed to complete the online form.

3. Authorised Persons: Identify the primary/main user who will submit the online application form in the online registration process. This individual is the authorised user and will be responsible for the LEI registration. Additionally, provide the names and email IDs of any secondary users named in the online form. These individuals play a crucial role in the legal entity identifier registration process.

4. Complete legal entity identifier registration Form: The form, including the payment gateway, consists of five pages.

Company Information Page: Enter all essential details of the company on this page.
Holding Company Page (Direct Parent Information Page): Fill in the details of the parent company.
Ultimate Parent Page: If the company is a step-down subsidiary, provide details of both the parent and ultimate parent.
Payment Page: Make payment once the form is complete.
Upload Page: Upload necessary documents on this page.

5. Payment: Once the form is completed, proceed to the payment gateway. Here, you have the option to make the payment online immediately or choose the demand draft option. Select "Save and Submit" after payment if you opt for online payment. The Legal Entity Identifier India Limited (LEIL) generates a reference number upon receipt of payment. This reference number becomes vital for future communications, and an email detailing the required documents to be submitted is sent.

6. Document Submission: Upload all necessary documents mentioned in the email received after online payment. Ensure the total size of the uploaded documents does not exceed 40MB. In case the upload is unsuccessful, the documents may be physically couriered to the following address:

Legal Entity Identifier India Limited (LEIL)

(The Clearing Corporation of India Ltd.)

CCIL Bhavan, 3rd Floor, S. K. Bole Road

Dadar West, Mumbai – 400028

7. Verification Process: After documents are uploaded or physically sent, LEIL verifies them along with the application form. If necessary, additional documents may be requested, and the applicant entity may be directed to make changes to the online application form.

8. Issue of LEI Code: Upon successful submission and verification of the form and related documents, LEIL issues the LEI code. This unique identifier is sent via email to the entity. It is crucial to provide this code to banks for transparent and secure financial transactions.

Also Read: Business Loan or Overdraft – Which is Better?

Renewal of the LEI Code

The validity of an LEI Code is one year. To maintain its usage, you must renew it. Simply go to the online portal and choose "Modify and Renewal" instead of the "Register" option. Upon entering the LEI code, the application form will automatically display all details. Any necessary modifications can be made accordingly. Make sure to check the "LEI Renewal" checkbox before proceeding. Complete the form, make the required payment, and submit the necessary documents.

Once all steps are successfully completed, the LEI Code undergoes renewal, and a confirmation is promptly received. This simple process will keep your LEI Code valid and help you seamlessly participate in transparent and accountable financial transactions. Renewing the LEI Code annually ensures ongoing compliance, and it contributes to the sustained effectiveness of the Legal Entity Identifier system.

Frequently Asked Questions - Legal Entity Identifier

1. What is a Legal Entity Identifier and what is its purpose?

The Legal Entity Identifier (LEI) is a 20-character alpha-numeric code designed to uniquely identify parties involved in financial transactions globally. Its purpose is to enhance the accuracy of financial data reporting systems and facilitate better risk management by creating a unique identifier for every legal entity engaged in financial transactions.

2. Which transactions should include LEI information?

LEI information is required for all single payment transactions exceeding Rs 50 Crore conducted by entities (non-individuals) via the NEFT and RTGS payment systems.

3. Is LEI required for Central Government, State Governments, Departments, and Ministries?

Government entities and their Departments/Ministries are exempt from obtaining LEI for payment transactions in NEFT and RTGS. However, Government-owned corporations or undertakings must obtain LEI for transactions exceeding Rs 50 Crore.

4. Is LEI required for individual customer transactions?

The LEI is unnecessary for transactions involving individual customers, as both the remitter and beneficiary are individuals. However, transactions involving non-individual parties require LEI.

5. What are the types of accounts for which LEI should be recorded?

The LEI should be recorded for all non-individual NEFT/RTGS transactions, ensuring comprehensive identification of legal entities involved in financial activities.