PEP represents politically exposed person, an individual with prominent public function or close association requiring enhanced due diligence. It is a compliance and reputational risk field. Include PEP status, relationship, remarks, and approval requirements. In credit appraisal, it supports identity checks, eligibility validation, regulatory classification, legal due diligence and audit readiness. The field should be supported by documentary evidence and should remain consistent across application data, KYC records and regulatory reporting. For example, a small mismatch in borrower name, registration status, beneficial ownership or regulatory category can delay approval or create audit exceptions. It matters because incorrect classification or missing evidence can create regulatory risk, wrong scheme treatment, audit exceptions or delayed approval. The common caution is to rely on verified documents and current regulatory rules rather than informal borrower declarations or outdated master data.