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LEI Mandatory for Cross-border Transactions Over ₹50 Crore

Current · Source: Reserve Bank of India · RBI/2021-22/137 · issued 10 Dec 2021 · ~2 min read
Quick answerFrom October 1, 2022, AD Category I banks must obtain LEI from resident non-individual entities for FEMA transactions of ₹50 crore and above per transaction. Non-resident entities can proceed without LEI to avoid disruption. Banks must validate LEI against the global GLEIF database.
The rule, in the simplest words
How it plays out — a real example

A forex & trade-finance officer in Mumbai processes a ₹60 crore payment for a local jewelry company buying gold from a Swiss supplier. She asks the company for their LEI, checks it on the GLEIF website, and sees it's valid. The Swiss supplier doesn't have a LEI, so she still processes the payment to avoid delays, following RBI's rule.

What changed

RBI has mandated LEI for all capital or current account transactions under FEMA of ₹50 crore and above per transaction, effective October 1, 2022. Previously, LEI was required only for OTC derivatives, non-derivative markets, large corporate borrowers, and large-value payment system transactions. Now, cross-border transactions also fall under the LEI requirement.

What it means for you

Banks must update their systems to capture and validate LEI for high-value cross-border transactions. This enhances transparency and reduces risk in foreign exchange dealings. Non-compliance could lead to operational delays, but RBI allows processing for non-resident entities without LEI to avoid disruption.

What you must do

Who it affects

AD Category I banks, Resident non-individual entities (companies, LLPs, trusts) undertaking cross-border transactions, Non-resident entities (as counterparties, though LEI is not mandatory for them)

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the threshold for mandatory LEI in cross-border transactions?

The LEI is mandatory for resident non-individual entities for any capital or current account transaction under FEMA of ₹50 crore and above per transaction, effective October 1, 2022.

What if a non-resident entity does not have an LEI?

AD Category I banks may process the transaction without LEI for non-resident counterparts to avoid disruption. However, banks should encourage voluntary submission of LEI.

Where can entities obtain an LEI in India?

Entities can obtain LEI from Legal Entity Identifier India Ltd. (LEIL), which is recognized by RBI and accredited by GLEIF. Details are available at https://www.ccilindia-lei.co.in.

📜 Read the original circular — full text as issued by RBI
RBI/2021-22/137 A.P. (DIR Series) Circular No. 20 December 10, 2021 To All Category-I Authorised Dealer Banks Madam / Sir, Introduction of Legal Entity Identifier for Cross-border Transactions The Legal Entity Identifier (LEI) is a 20-digit number used to uniquely identify parties to financial transactions worldwide to improve the quality and accuracy of financial data systems. LEI has been introduced by the Reserve Bank in a phased manner for participants in the over the counter (OTC) derivative, non-derivative markets, large corporate borrowers and large value transactions in centralised payment systems. 2. In order to further harness the benefits of LEI, it has been decided that AD Category I banks, with effect from October 1, 2022, shall obtain the LEI number from the resident entities (non-individuals) undertaking capital or current account transactions of ₹50 crore and above (per transaction) under FEMA, 1999. As regards non-resident counterparts/ overseas entities, in case of non-availability of LEI information, AD Category I banks may process the transactions to avoid disruptions. Further, AD Category I banks may encourage concerned entities to voluntarily furnish LEI while undertaking transactions even before October 1, 2022. Once an entity has obtained an LEI number, it must be reported in all transactions of that entity, irrespective of transaction size. 3. AD Category-I banks shall have the required systems in place to capture the LEI information and ensure that any LEI captured is validated against the global LEI database available on the website of the Global Legal Entity Identifier Foundation (GLEIF). 4. AD banks may bring the contents of this circular to the notice of their constituents concerned and advise entities who undertake large value transactions (₹50 crore and above) under FEMA, 1999 to obtain LEI in time, if they do not already have one issued. 5. Entities can obtain LEI from any of the Local Operating Units (LOUs) accredited by the GLEIF, the body tasked to support the implementation and use of LEI. In India, LEI can be obtained from Legal Entity Identifier India Ltd. (LEIL) ( https://www.ccilindia-lei.co.in ), which is also recognised as an issuer of LEI by the Reserve Bank under the Payment and Settlement Systems Act, 2007. The rules, procedures and documentation requirements may be ascertained from LEIL. 6. The directions contained in this circular are being issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law. Yours faithfully Ajay Kumar Misra Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/137 · issued 10 Dec 2021. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update systems to capture LEI for all resident non-individual entities undertaking FEMA transactions of ₹50 crore and above per transaction from October 1, 2022.
📜 Compliance
  • Validate each LEI against the global GLEIF database before processing transactions.
  • Advise clients with large-value FEMA transactions to obtain LEI from LEIL or other GLEIF-accredited LOUs well before the deadline.
  • Encourage voluntary LEI submission for transactions below ₹50 crore to build compliance readiness.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (AD Category I banks, Resident non-individual entities (companies, LLPs, trusts) undertaking cross-border transactions, Non-resident entities (as counterparties, though LEI is not mandatory for them)), your first concrete step on “LEI Mandatory for Cross-border Transactions Over ₹50 Crore” is: “Update systems to capture LEI for all resident non-individual entities undertaking FEMA transactions of ₹50 crore and above per transaction from October 1, 2022.” (RBI issued this 10 Dec 2021).

  1. Circular: RBI/2021-22/137 -- LEI Mandatory for Cross-border Transactions Over ₹50 Crore
  2. Issued: 10 Dec 2021
  3. Action required: Update systems to capture LEI for all resident non-individual entities undertaking FEMA transactions of ₹50 crore and above per transaction from October 1, 2022.
  4. Action required: Validate each LEI against the global GLEIF database before processing transactions.
  5. Action required: Advise clients with large-value FEMA transactions to obtain LEI from LEIL or other GLEIF-accredited LOUs well before the deadline.
  6. Action required: Encourage voluntary LEI submission for transactions below ₹50 crore to build compliance readiness.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12206&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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