Priya Patel
The Reserve Bank of India (RBI) has revised its definition of Politically-Exposed Persons (PEPs) under its Know Your Customer (KYC) norms. The previous definition of PEPs was open-ended and lacked clarity, which caused issues for bankers, politicians, and others. The new definition includes individuals who have held prominent public functions in foreign countries, such as heads of states/governments, senior politicians, government officials, and important political party officials. The RBI’s move is aimed at making it easier for PEPs to carry out various banking transactions, including availing loans.
The revised KYC norms also require additional due diligence for bank accounts of PEPs, with a senior bank official responsible for conducting special checks. The central bank has urged banks and other financial services to implement these changes immediately.
The RBI’s decision comes after concerns were raised that PEPs were finding it difficult to get loans or open bank accounts. By providing a clearer definition of PEPs, the RBI aims to alleviate this issue and ensure that PEPs have access to banking services.
