{"id":19065,"date":"2024-01-07T05:52:12","date_gmt":"2024-01-07T00:22:12","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=19065"},"modified":"2025-04-05T15:02:37","modified_gmt":"2025-04-05T09:32:37","slug":"pep","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/pep\/","title":{"rendered":"RBI Norms for Politically-Exposed Persons (PEPs)"},"content":{"rendered":"<h2>New RBI Norms for Politically-Exposed Persons (PEPs)<\/h2>\n<ul>\n<li>Who are PEPs? In the amended KYC master direction, the central bank defines PEPs as &#8220;individuals who are or have been\u00a0entrusted with prominent public functions by a foreign country, including the heads of states\/governments, senior politicians, senior government or judicial or military officers, senior executives of state-owned corporations, and important political party officials&#8221;.<\/li>\n<li>REs have the option of establishing a relationship with PEPs (whether as customers or beneficial owners).\u00a0<\/li>\n<li>REs have to perform regular customer due diligence and\u00a0also follow additional conditions prescribed by the RBI\u00a0to transact with PEPs.<\/li>\n<li>Some\u00a0additional conditions include\u00a0establishing an\u00a0appropriate risk management system\u00a0to determine whether the customer or the beneficial owner is a PEP.<\/li>\n<li>REs\u00a0have to take reasonable measures to establish the source of funds\/ wealth.<\/li>\n<li>They also\u00a0need to get approval from senior management to open an account for a PEP.<\/li>\n<\/ul>\n<h2>Key Facts about Financial Action Task Force (FATF)<\/h2>\n<ul>\n<li>FATF is an\u00a0inter-governmental policy-making and standard-setting body dedicated to\u00a0combating money laundering and terrorist financing.<\/li>\n<li>It was\u00a0established in 1989 during the G7 Summit in Paris to develop policies against money laundering.<\/li>\n<li>In 2001 its mandate expanded to include terrorism financing.<\/li>\n<li>Headquarters: Paris, France.<\/li>\n<li>FATF members include\u00a039 countries, including the United States, India, China, Saudi Arabia, Britain, Germany, France, and the EU as such.<\/li>\n<li>India became a member of FATF\u00a0in 2010.<\/li>\n<li>What are FATF &#8216;grey list&#8217; and &#8216;blacklist&#8217;? FATF has 2 types of lists:\n<ul>\n<li>Black List: Countries knowns as\u00a0Non-Cooperative Countries or Territories (NCCTs) are put on the blacklist. These countries\u00a0support terror funding and money laundering activities.\u00a0<\/li>\n<li>Grey List: Countries that are considered a safe haven for supporting terror funding and money laundering\u00a0are put on the FATF grey list. This inclusion\u00a0serves as a warning to the country that it may enter the blacklist.<\/li>\n<\/ul>\n<\/li>\n<li>Three countries\u00a0North Korea, Iran, and Myanmar are currently on\u00a0FATF\u2019s blacklist.<\/li>\n<li>Consequences of being on the FATF blacklist:\n<ul>\n<li>No financial aid is given\u00a0to them\u00a0by the\u00a0International Monetary Fund (IMF), the World Bank, the Asian Development Bank (ADB), and the European Union (EU).<\/li>\n<li>They also face a number of\u00a0international economic and financial restrictions and sanctions.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3>Q1) What is Know Your Customer (KYC) in banking?<\/h3>\n<p>KYC means Know Your Customer and sometimes Know Your Client. KYC or KYC check is the mandatory process of identifying and verifying the client&#8217;s identity when opening an account and periodically over time. In other words, banks must ensure that their clients are genuinely who they claim to be. Banks may refuse to open an account or halt a business relationship if the client fails to meet minimum KYC requirements.\u00a0<\/p>\n<p><strong>Source:<\/strong> <a href=\"https:\/\/www.business-standard.com\/finance\/news\/rbi-gives-clarity-to-politically-exposed-persons-term-to-meet-fatf-norms-124010500364_1.html\" target=\"_blank\" rel=\"nofollow noopener\"><u>RBI gives clarity to &#8216;politically exposed persons&#8217; term to meet FATF norms<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Politically-Exposed Persons are individuals who are or have been entrusted with prominent public functions by a foreign country<\/p>\n","protected":false},"author":5,"featured_media":19066,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-19065","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/19065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=19065"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/19065\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/19066"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=19065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=19065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=19065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}