Fraser Nelson Fraser Nelson

RBS’s definition of a ‘politically exposed person’

Are you a “politically exposed person”? This is what RBS wants to know about its prospective clients, this is the question that led me (when posing as a potential client) to be asked if I was a member of a political party. And when a state-controlled bank like RBS asks people if they are “politically exposed” – a phrase with more than a hint of menace – it is no surprise that it sends shivers down so many spines. What on earth could they mean? What were they trying to get at?

I put some questions about this to RBS earlier today. Here are their replies, and my comments.

Q1 – What does RBS understand by the term “Politically Exposed Person (PEPs)” A – A PEP can be defined as an individual who is or has been entrusted with a prominent public function; examples include heads of state, senior politicians, government, judicial or military officials, senior executives of state owned corporations and political party officials. The definition is not intended to cover middle ranking or more junior individuals.

 Comment: So we’re talking about a handful of people in the country – less than 0.001% of the population. So why were ordinary members of the public being asked? On the off chance that they could be a head of state? This doesn’t stack up.

Q2 – Can you  give an example where this had relevance to services provided by Streamline?

A: For reasons of customer confidentiality we are not at liberty to answer this question.

Comment: ie – there is no reason why RBS would have any reason to believe that the people applying for its accounts were heads of state or ministers. The question is absolutely unjustified.

Q3. Has question being asked for opening other accounts and, if so, which ones?

A: As Know Your Customer is an FSA requirement, it is feasible that this question may have been asked during other account opening processes.

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