Politically Exposed Person
As per the RBI definition, PEPs are individuals who are or have been entrusted with
prominent public functions in a foreign country e.g., Heads of States or Governments,
senior politicians, senior government/judicial/military officers, senior executives of
state-owned corporations, important political party officials, etc.
Such individuals are considered risky from a money laundering perspective and
require additional due diligence and transactional scrutiny. For the Bank, the risks
associated with these individuals are not just from a compliance perspective but also
from a reputational one.
Companies such as Dow Jones and LexisNexis provide customized PEP lists for a fee
and the Bank can also conduct an Internet search using Google. For guidelines on
how to search the Internet using Google, please refer to Annexure A, Guidelines on
Performing Background Checks using Google.
Once a customer or a person associated with an account is identified as a PEP or the
close relative of a PEP, the Bank is required to perform the following steps:
− The CRO or the BM should gather all the available information on the PEP
and confirm it against information available on the public domain;
− The CRO or BM must obtain information on the identity of the PEP and
source of funds for the account; and
− The PO at the Bank must sign off on the acceptance of the customer,
categorize him as high risk and perform EDD. The account must also be
subjected to enhanced transaction monitoring.
In the event that an existing customer or beneficial owner is identified as PEP, the PO
along with the AML Compliance Group will be required to sign off on continuing the
relationship. The account and the individual will then be subject to the same process
as above for a new PEP account.
As per the RBI definition, PEPs are individuals who are or have been entrusted with
prominent public functions in a foreign country e.g., Heads of States or Governments,
senior politicians, senior government/judicial/military officers, senior executives of
state-owned corporations, important political party officials, etc.
Such individuals are considered risky from a money laundering perspective and
require additional due diligence and transactional scrutiny. For the Bank, the risks
associated with these individuals are not just from a compliance perspective but also
from a reputational one.
Companies such as Dow Jones and LexisNexis provide customized PEP lists for a fee
and the Bank can also conduct an Internet search using Google. For guidelines on
how to search the Internet using Google, please refer to Annexure A, Guidelines on
Performing Background Checks using Google.
Once a customer or a person associated with an account is identified as a PEP or the
close relative of a PEP, the Bank is required to perform the following steps:
− The CRO or the BM should gather all the available information on the PEP
and confirm it against information available on the public domain;
− The CRO or BM must obtain information on the identity of the PEP and
source of funds for the account; and
− The PO at the Bank must sign off on the acceptance of the customer,
categorize him as high risk and perform EDD. The account must also be
subjected to enhanced transaction monitoring.
In the event that an existing customer or beneficial owner is identified as PEP, the PO
along with the AML Compliance Group will be required to sign off on continuing the
relationship. The account and the individual will then be subject to the same process
as above for a new PEP account.
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