LEI (Legal Entity Identifier)
A Legal Entity Identifier (LEI) is a 20-character alphanumeric code assigned to legal entities participating in financial transactions, enabling unique, globally standardised identification of companies and organisations in financial markets.
The LEI system was conceived in the aftermath of the 2008 global financial crisis, when regulators discovered that they lacked a reliable mechanism to identify and trace the interconnected web of counterparties in derivatives and financial transactions. The G20 and the Financial Stability Board (FSB) mandated the creation of a global LEI system, which became operational in 2012 under the oversight of the Global LEI Foundation (GLEIF). India became a part of this global system through RBI and SEBI mandates.
In India, the LEI framework was introduced by the RBI in phases starting from 2017. Initially, it was mandated for all participants in the over-the-counter (OTC) derivatives markets. The requirement was subsequently extended to large corporate borrowers — first those with aggregate fund- and non-fund-based credit exposures of ₹1,000 crore and above from the banking system, and progressively lower thresholds were set to expand coverage. By 2020, all non-individual participants in certain large-value transactions in the RTGS and NEFT systems were required to have an LEI.
LEI codes are issued by Local Operating Units (LOUs) accredited by the GLEIF. In India, the Legal Entity Identifier India Limited (LEIL), a subsidiary of The Clearing Corporation of India Limited (CCIL), serves as the accredited LOU for issuing and maintaining LEI codes. Companies apply for an LEI by providing their registration details, which are verified against official records. LEIs are renewed annually and the underlying reference data — including the entity's legal name, registration number, country of operation, and ownership structure — is published in a global public database.
The public availability of LEI reference data supports transparency and reduces the cost of counterparty due diligence for financial institutions. When a bank, mutual fund, or insurance company needs to verify the identity of a corporate counterparty, an LEI search on the GLEIF database provides instantly accessible, verified information — replacing expensive and slow manual verification processes.
SEBI has mandated LEIs for FPIs, issuers, and other market participants, progressively integrating LEI into the data architecture of Indian capital markets. For compliance officers, treasurers, and trade finance professionals, ensuring that an entity's LEI is current, accurate, and maintained is an ongoing operational requirement.