Officials of the Reserve Bank of India, the Ministry of Finance, and the Department of Revenue are set to be summoned before a parliamentary committee on October 30 over the ” non-disbursal” of a loan to a family member of a BJP Rajya Sabha MP on the grounds of being “politically exposed.”
The action comes in the wake of a meeting held by the Standing Committee on Finance on Tuesday, The Indian Express reported.
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It is learnt that an immediate family member of BJP MP Radha Mohan Das Agrawal recently encountered a loan denial from a bank due to being categorised as a “Politically Exposed Person.” This issue reportedly surfaced during discussions among Members of Parliament a few days ago and was subsequently addressed in the panel’s meeting on Tuesday, as per information from the Parliament website.
According to the Parliament website, the matter slated for discussion during the committee meeting pertained to Non-Banking Financial Companies (NBFCs). Representatives from the Department of Financial Services, Reserve Bank of India (RBI), and Small Industries Development Bank of India were scheduled to provide “Oral evidence on the subject ‘Issues relating to NBFCs.’
Congress MP Manish Tewari initially raised the concern, which was then supported by MPs from various political parties.
According to the RBI, “Politically Exposed Persons (PEP)” 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”.
According to a 2011 master circular of the RBI, “Banks should gather sufficient information on any person/customer of this category intending to establish a relationship and check all the information available on the person in the public domain.”
“Banks should verify the identity of the person and seek information about the sources of funds before accepting the PEP as a customer. The decision to open an account for PEP should be taken at a senior level which should be spelt out in the Customer Acceptance policy. Banks should also subject such accounts to enhanced monitoring on an ongoing basis. The above norms may also be applied to the accounts of the family members or close relatives of PEPs,” it stated.