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  • Mar 11, 2023
  • Government amends anti-money laundering rules, brings 'politically exposed persons' under PMLA

    The government has amended rules under the anti-money law, making it mandatory for banks and financial institutions to record financial transactions of politically exposed persons (PEP). Also, financial institutions or reporting agencies will be required to collect information about the financial transactions of non-profit organisations or NGOs under the provisions of the Prevention of Money Laundering Act (PMLA).

    Under the modified PML Rules, the Finance Ministry defined PEPs as "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".

    The financial institutions will also have to register details of their NGO clients on the Darpan portal of the Niti Aayog and maintain the record for five years after the business relationship between a client and a reporting entity has ended or the account has been closed, whichever is later, the amendment said.