The Centre has amended money laundering rules, putting non-government organisations under tighter scrutiny.

The amendments, notified on Tuesday by the Union Ministry of Finance, also significantly expand the scope of the Enforcement Directorate to access the financial transactions of individuals and organisations. The Enforcement Directorate is the main agency that investigates allegations under the Prevention of Money Laundering Act.

Through the modified rules, the finance ministry has also brought “politically exposed persons” under scrutiny.

The ministry has defined “politically exposed persons” 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”.

Banks and financial institutions will now have to maintain records of financial transactions of these “politically exposed persons” as well as NGOs.

The financial institutions will also have to register details of their NGO clients on the Niti Aayog’s Darpan portal 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, according to the amendments.

In addition, the definition of a non-profit organisation has been expanded to cover all religious or charitable entities registered as a trust or a society under the Societies Registration Act or any similar state legislation or a company registered under the Companies Act.