PEP (Politically Exposed Person) is a person who is authorised to perform prominent public functions in a country and include governors of state, members of Parliament, military officers, senior government and judicial executives and heads of local bodies such as municipal corporations, among others.
Once you declare yourself as a PEP, financial institutions such as banks and mutual fund houses do additional due diligence while processing your application as a preventive measure to avoid any possible fraud in the future.