Implementation of the concept of “politically exposed persons (PEPs)” in India"

What is it about?

The purpose of this paper is to critically examine the concept of “politically exposed persons (PEPs)” as provided under the Indian anti-money laundering (AML) regime, particularly focussing on the Reserve Bank of India guidelines to its supervised banks on dealing with the potential money laundering risks posed by PEPs.

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Why is it important?

The paper demonstrates in an exceptional way that despite variations in the scope of the PEPs definition at an international level, all the standard setters have included certain key individuals (both domestic and foreign PEPs and “close associates” of PEPs) within the scope of the definition and how the legal and regulatory requirements in India are falling short of compliance even with these minimum key requirements. By adopting a step-by-step approach in critically examining the current legal and regulatory requirements enforced on banks in India to efficiently deal with the money laundering risks posed by PEPs, the paper makes a valuable contribution in highlighting the steps that might be taken to strengthen PEPs’ AML controls in India.