What is the Full Form of RCA in Banking?

Thе Full Form of RCA in Banking is Rеlativеs and Closе Associatеs. RCA means Relatives and Close Associates of PEPs. They comprise family members or close business associates or those with any prominent affiliation with a PEP. RCAs checking is mandatorily required because they have commonly been utilised to exploit and blackmail PEPs over activities such as money laundering. Companies should disclose RCAs to remain compliant with Anti-Money Laundering laws and mitigate risks associated with them effectively.

Who Qualifiеs as an RCA?

An RCA can be broadly described as any person who can be considered close to a PEP. It may involve close family members, which include children, siblings, spouse/partner, close personal friends, extended family like aunts, uncles, cousins, and legal advisors like lawyers or attorneys. Basically, an RCA is any person whose relation with a PEP can be exploited to facilitate money laundering or other criminal activities.

Why are RCAs arе Important for AML Compliancе?

RCAs form the core of AML compliance as they fall under the umbrella of PEPs, sometimes referred to as “PEPs by association.” This means that RCAs shall also be screened like PEPs in AML regulations. RCAs, while not holding any public position, may still be connected with financial crimes because of their links to a PEP. They may be conduits or proxies for PEPs or may be used by criminals in an attempt to falsely implicate PEPs. The identification of RCAs enriches risk assessment and extends monitoring to more high-risk individuals, permitting a comprehensive view of likely financial crimes.