**Summary:**
This circular, RBI/2023-24/107 DOR.AML.REC.6614/01.001/2023-24 dated January 04, 2024, issued by the Reserve Bank of India (RBI), amends the Master Direction (MD) on Know Your Customer (KYC) regulations. The key change involves clarifying the definition of Politically Exposed Persons (PEPs). Previously defined in sub-clause (xvii) of clause (a) of Section 3 of the MD on KYC, the definition of PEPs is now included as an explanation to Section 41 of the Master Direction. PEPs are defined as individuals who are or have been entrusted with prominent public functions by a foreign country, including Heads of State/Governments, senior politicians, senior government or judicial or military officers, senior executives of state-owned corporations, and important political party officials. Consequently, sub-clause (xvii) of clause (a) of Section 3 has been removed. Regulated Entities (REs) are directed to undertake Customer Due Diligence (CDD) as per the amended guidelines. For inquiries, contact Saidutta Sangram Keshari Pradhan, General Manager, Department of Regulation, Central Office, Central Office Building, 12th/13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001. Tel No: 22661602, 22601000 Fax No: 022-2270 5691.
Key Entities Referenced
Reserve Bank of India: The central bank of India, referred to as RBI in the document.
Master Direction (MD) on KYC: A set of guidelines issued by the Reserve Bank of India regarding Know Your Customer (KYC) procedures for Regulated Entities (REs).
Regulated Entities (REs): Entities regulated by the Reserve Bank of India that are subject to KYC guidelines.
Customer Due Diligence (CDD): The process Regulated Entities must undertake to identify their customers and assess the risks associated with them.
Politically Exposed Persons (PEPs): Individuals who are or have been entrusted with prominent public functions by a foreign country. The definition of PEPs is clarified in the amendment.
Section 41 of the Master Direction: The section of the Master Direction on KYC to which the definition of Politically Exposed Persons is added as an explanation.
Saidutta Sangram Keshari Pradhan: General Manager at the Department of Regulation, Reserve Bank of India, and the signatory of the notification.
Mumbai, Maharashtra: Location of the Central Office of the Reserve Bank of India's Department of Regulation.
RBI/2023-24/107
DOR.AML.REC.66/14.01.001/2023-24 January 04, 2024
The Chairpersons/ CEOs of all the Regulated Entities
Dear Sir/Madam,
Amendment to the Master Direction (MD) on KYC
Please refer to the Master Direction (MD) on KYC dated February 25, 2016, as amended
from time to time, in terms of which Regulated Entities (REs) have to undertake Customer
Due Diligence (CDD), as per the process laid out therein, for their customers.
2. In the extant Direction, the definition of Politically Exposed Persons (PEPs) is provided
in sub-clause (xvii) of clause (a) of Section 3 of the MD on KYC. However, in order to
provide better clarity, it has been decided to include the definition of PEPs as an
explanation to Section 41 of the Master Direction as under:
“Explanation: For the purpose of this Section, “Politically Exposed Persons” (PEPs) are
individuals who are or have been entrusted 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.”
3. Consequently, the sub-clause (xvii) of clause (a) of Section 3 of the above quoted Master
Direction has been removed. The relevant Sections of the MD on KYC are hereby amended
to reflect the changes as mentioned above.
Yours faithfully,
(Saidutta Sangram Keshari Pradhan)
General Manager
िविनयमन िवभाग, क��ीय कायार्लय, क��ीय कायार्लय भवन, 12व�/ 13व� मंिज़ल, शहीद भगत �संह माग,र् फोटर्, मुंबई- 400001
टेलीफोन/ Tel No: 22661602, 22601000 फैक्स/ Fax No: 022-2270 5691
Department of Regulation, Central Office, Central Office Building, 12th/ 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai - 400001
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