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In a partial modification of KYC norms, the government has revised the definition of Politically Exposed Persons (PEPs).
Through a gazette notification, the Ministry of Finance has increased the scope of definition by including a person who is entrusted by a foreign country with public functions. It said, “PEPs are individuals who have been entrusted with prominent public functions by a foreign country, including the heads of States or Governments, senior politicians, senior government or judicial or military officers, senior executives of state-owned corporations and important political party officials.”
In addition, the Ministry has asked financial institutions like mutual fund and insurance companies to do due diligence of investments coming from non-profit organisation like NGOs.
The ministry said, “Every banking company or financial institution or intermediary, as the case may be, shall register the details of a client, in case of client being a non-profit organisation, on the DARPAN Portal of NITI Aayog, if not already registered, and maintain such registration records for a period of five years after the business relationship between a client and a reporting entity has ended or the account has been closed, whichever is later.”