Fats or oils are split partially or completely to obtain fatty acids that find wide applications in oleo-chemical industries. Lipase-mediated complete splitting (hydrolysis) of oils is a green process having great potential to replace the traditional methods of oil splitting. However, cost of lipases, mechanistic kinetic equilibrium and associated operational limitations prove to be deterrents for scale up of the enzymatic oil splitting process. In the present study, we demonstrate the use of immobilised 1,3-regioselective lipase (HyLIP) for complete hydrolysis of oil in monophasic reaction medium. Incorporation of a polar organic solvent (tert-butanol, 1:5, v/v) homogenises the oil-water mixture and contributes positively towards complete hydrolysis. The monophasic oil hydrolysis reaction with optimised water concentration (0.05 %, v/v) gave Free Fatty Acid (FFA) yield of 88 % (HyLIP and Novozym-435) and 66 % (TLIM and RMIM). Smart reaction engineering and modification of the reaction intermediates to favourable substrate lead to similar to 99 % degree of hydrolysis of triglycerides with similar to 90 % FFA yield using 1,3-regioselective lipase. The present work becomes basic platform for developing technologies for synthesis of fatty acids, monoglycerides, diglycerides and glycerol.