Is the LEI Code Mandatory in India? Regulatory Requirements.
In India, the LEI code is mandatory for a broad range of companies engaged in financial transactions, making it essential for businesses to comply. The primary purpose of the LEI is to increase transparency in the financial market and facilitate the identification of participants in global transactions.
Is the LEI Code Mandatory for All Companies in India?
The following types of companies are required to have an LEI code in India:
Financial Institutions and Market Participants
- Banks and Non-Banking Financial Companies (NBFCs) involved in derivatives, currency operations, securities, and other financial products.
- Insurance companies participating in financial transactions.
Companies Engaged in Capital Market Operations
- All legal entities involved in transactions on stock markets (such as stocks, bonds, futures, and options) and derivatives markets.
- Companies trading on exchanges must have an LEI code for all transactions exceeding certain thresholds.
Companies Involved in Cross-Border Transactions
- Companies conducting cross-currency transactions or engaging in international financial operations must have an LEI code.
- For instance, all large companies making foreign currency transactions exceeding 50 million Indian rupees per day are required to have an LEI code.
Participants in Payment Systems
- Organizations participating in large payment systems, such as RTGS (Real-Time Gross Settlement), must register and obtain an LEI code for identification purposes.
Corporate and Government Companies
- Large corporate and government organizations conducting significant financial transactions through the Reserve Bank of India (RBI) are required to have an LEI code.
Is the LEI Code Mandatory in India? In Which Cases and Transaction Types?
The LEI code is mandatory in India for the following transaction types:
- Trading in derivatives on organized and over-the-counter markets.
- Interacting with Indian banks for credit operations and participating in their transactions.
- When companies engage in international financial operations or foreign investments.
Regulatory Requirements for LEI Code in India
The Reserve Bank of India (RBI) has introduced mandatory LEI code requirements for:
- Participants in the currency market since 2017.
- All large corporate borrowers (loans and credit lines exceeding 5 billion Indian rupees, approximately 7 million USD).
- Participants in international cross-border transactions and large payment systems.
How do you obtain a LEI Code in India?
You can obtain an LEI code in India through accredited operators and official registration agents, such as LEIpapa.
The process involves submitting an application with the company’s basic registration details, confirming legal status, and paying the registration fee.
Conclusion
The LEI code is mandatory for a wide range of companies in India that engage in financial transactions, especially those involving large payments, international trade, or financial derivatives. Companies without an active LEI code may face restrictions on access to financial services and potential penalties from regulators in such cases.
FAQ
What is Stock Market?
What is Derivatives Market?
What is Reserve Bank of India (RBA) and its functions?
According to the RBA’s website, The Reserve Bank of India was established on April 1, 1935 following the provisions of the Reserve Bank of India Act, 1934. Though originally privately owned, since nationalisation in 1949, the Reserve Bank is wholly owned by the Government of India.
The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as “to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage; to have a modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price stability while keeping in mind the objective of growth.”
LEIpapa: Your Trusted Partner in LEI Registration
Why Choose LEIpapa for LEI registration?
Expert Guidance: Our team of seasoned professionals is here to guide you every step of the way, ensuring that your LEI registration is done right the first time.
Swift and Simple Process: We’ve streamlined our procedures to provide you with a quick and straightforward registration experience.
Global Compliance: With LEIpapa, you can be confident that your LEI registration adheres to all global regulatory requirements, keeping you compliant and secure.
How to Register an LEI with LEIpapa?
Easy Online Application: Start your LEI registration journey by filling out our simple online application. It’s fast, user-friendly, and can be completed in just a few minutes.
Support at Every Step: Our dedicated customer support team is always on hand to assist you with any queries or guidance you may need throughout the process.
Does LEIpapa have a community?
At LEIpapa, we understand the importance of a Legal Entity Identifier (LEI) in today’s interconnected global economy, and we’re committed to making your registration process as smooth and hassle-free as possible. Visit LEIpapa web app or contact us to start your LEI registration today.
LEIpapa is an Official LEI Registration Agent and a partner of Ubisecure RapidLEI. We build the most reliable and transparent corporate data registry on Global LEI system.