Why India Decided to Act
India’s financial market is enormous. Every day, hundreds of millions of transactions move between banks, businesses, and financial institutions. For years, however, a familiar problem persisted: who actually stands behind a transaction?
The 2008 financial crisis made that question impossible to ignore. Regulators discovered they could not quickly identify which market participants were exposed to failing counterparties. Data was fragmented, identifiers were inconsistent, and cross-border transparency was nearly nonexistent. As a result, the G20 established the LEI (Legal Entity Identifier, a global identifier for legal entities in financial transactions) system, overseen by GLEIF (Global Legal Entity Identifier Foundation, the body that manages the global LEI system).
GLEIF tracks LEI adoption across regulations worldwide and India stands out as one of the most thorough examples of how a country can roll out LEI at scale.
A Phased Rollout: 2017 to 2025
The Reserve Bank of India (RBI, India’s central bank) started with the largest borrowers in 2017 and extended the requirement in stages. Each phase came with a firm deadline and a clear threshold, so businesses had time to prepare without indefinite delays.
The timeline for borrowers ran as follows. Borrowers with total credit exposure above ₹25 crore (approximately €2.7 million) had to obtain an LEI by 30 April 2023. Those with exposure above ₹10 crore (approximately €1.1 million) had until 30 April 2024. Finally, the last phase closed on 30 April 2025, when the requirement extended to all borrowers with aggregate exposure of ₹5 crore (approximately €550,000) or more.
All three phases are now complete. In other words, the LEI requirement for borrowers in India is fully in force.
Who Needs an LEI and for What
The RBI has established LEI requirements across three areas.
Borrowers. All non-individual borrowers with aggregate credit exposure of ₹5 crore or more from banks and financial institutions must hold a valid LEI. The RBI calculates exposure across all lenders combined, covering both loans and other credit facilities. Moreover, under the RBI’s official circular, a borrower without a valid LEI cannot receive a new loan, and banks cannot renew or extend any existing facility either.
Large payments. Since 1 October 2022, all single payment transactions of ₹50 crore (approximately €5.5 million) or more through NEFT (National Electronic Funds Transfer) or RTGS (Real-Time Gross Settlement) must include the LEI of both the remitter and the beneficiary. In addition, this applies to all non-individual entities, with no exceptions for the transaction type.
Cross-border transactions. From the same date, authorised banks must record and report LEI details for all cross-border transactions of ₹50 crore or more under FEMA (Foreign Exchange Management Act, India’s law governing foreign currency transactions).
SEBI Requirements for Securities Markets
The Reserve Bank of India is not the only regulator requiring an LEI. The Securities and Exchange Board of India (SEBI, India’s capital markets regulator) has separately mandated LEI for non-individual entities participating in securities markets. This covers stock trading, derivatives trading, and other regulated securities market activities. In addition, SEBI requires foreign portfolio investors to provide LEI details at registration, at renewal, and through ongoing know-your-client checks. As a result, businesses active in both banking and capital markets need a single LEI that satisfies both regulators at once.
What Happens Without an LEI
The RBI’s enforcement approach is straightforward. There are no fines. Instead, the transaction simply does not go through.
No LEI means no new credit. A borrower without a valid LEI cannot get a new loan approved or an existing one renewed. Furthermore, since the RBI assesses exposure across all lenders, this applies regardless of which bank the business approaches.
Payments stop. Banks will not process NEFT or RTGS transactions above the threshold without a valid LEI for both parties. As a result, large routine payments stop until the business resolves the issue.
An expired LEI causes the same problem as no LEI at all. Once a code lapses, it appears as “lapsed” in the GLEIF database. Consequently, banks checking against the live feed will reject it. Renewing is straightforward, but waiting until a payment fails is not the right moment to find out.
India as Part of a Wider Pattern
India’s approach has several things going for it. The phased timeline gave businesses advance notice. The enforcement mechanism is practical rather than punitive. Moreover, the requirement has expanded steadily downward, reaching businesses that the original 2017 rules would not have covered.
Nevertheless, India is not an isolated case. EMIR requires an LEI for derivatives reporting across the EU. Similarly, MiFID II established the “no LEI, no trade” rule for securities markets. ISO 20022 is embedding LEI into cross-border payment messaging globally. And the US Financial Data Transparency Act has established LEI as the single common identifier across nine federal financial agencies.
India fits into this pattern. The logic is the same everywhere: one identifier, verified data, and a clear link between a transaction and the legal entity behind it.
One LEI, Multiple Markets
For businesses operating internationally, there is a practical upside to all of this. An LEI is valid everywhere. Specifically, the same 20-character code works for RBI compliance in India, EMIR reporting in Europe, and any other jurisdiction that recognises the standard. Therefore, there is no need to register separately for each market.
If your LEI is already active, the main thing is to keep it that way. An expired code will not pass any reporting or payment system. Registering an LEI takes just a few minutes and the code is issued almost immediately. If your existing code is coming up for renewal, you can renew it quickly and avoid any disruption.