Know Your Customer (KYC) and Anti-Money Laundering (AML) Policy

In order to prevent banks and other financial institutions from being used as a channel for Money Laundering (ML)/Terrorist Financing (TF) and to ensure the integrity and stability of the financial system, efforts are continuously being made both internationally and nationally, by way of prescribing various rules and regulations. Internationally, the Financial Action Task Force (FATF) sets standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. India, being a member of FATF, is committed to upholding measures to protect the integrity of international financial system.

In India, the Prevention of Money-Laundering Act, 2002 and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, form the legal framework on Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT). In terms of the provisions of the PML Act, 2002 and the PML Rules, 2005, as amended from time to time by the Government of India, Regulated Entities (REs) are required to follow certain customer identification procedures while undertaking a transaction either by establishing an account-based relationship or otherwise and to monitor their transactions.

In view of the above, Reserve Bank of India (RBI) has issued Master Direction – Know Your Customer (KYC) Direction, 2016 vide its Master Direction DBR.AML.BC.No.81/14.01.001/2015-16 dated February 25, 2016 (as amended from time to time) (“RBI Directions”). The said Directions are applicable to every entity regulated by RBI including Non-Banking Financial Companies (NBFCs).

Auriolus Finvest Private Limited (hereinafter referred to as “Company”) has prepared this Know Your Customer (KYC) and Anti-Money Laundering (AML) Policy (hereinafter referred to as the “Policy”) in adherence to all applicable Directions issued by RBI from time to time and shall make appropriate modifications to this policy, if necessary, to conform to the standards so prescribed.

1. Objective

   The primary objective of this Policy is to lay down explicit criteria for acceptance of customers, to establish procedures to verify the identity of customers and/or their authorised representatives for opening of loan account, to develop measures for conducting due diligence in respect of customers, to establish processes and procedures for regular monitoring of transactions particularly transactions of high value and/or transactions of suspicious nature and reporting of such transactions, if required and to prevent the Company from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities.

   KYC procedures also enable the Company to know / understand its customers and their financial dealings in a better way which in turn help it manage its risks prudently.

2. Applicability

   This policy is applicable across all branches / business segments of the Company and its subsidiaries, located in India or abroad, if any, and is to be read in conjunction with related operational guidelines issued from time to time.

3. Compliance with PML Act/Rules

   The Company shall ensure compliance with PML Act/Rules, including regulatory instructions in this regard and should provide a bulwark against threats arising from money laundering, terrorist financing, proliferation financing and other related risks. While ensuring compliance of the legal/regulatory requirements as above, the Company may also consider the adoption of best international practices taking into account the FATF standards and FATF guidance notes, for managing risks better.

4. Money Laundering and Terrorist Financing Risk Assessment
   1. If it is considered necessary based on the nature of the products of the Company, the Company shall carry out ‘Money Laundering (ML) and Terrorist Financing (TF) Risk Assessment’ exercise periodically to identify, assess and take effective measures to mitigate its money laundering and terrorist financing risk for clients, countries or geographic areas, products, services, transactions or delivery channels, etc.
      The assessment process should consider all the relevant risk factors before determining the level of overall risk and the appropriate level and type of mitigation to be applied. While preparing the internal risk assessment, the Company shall take cognizance of the overall sector-specific vulnerabilities, if any, that the regulator/supervisor may share with the Company from time to time.
   2. The risk assessment by the Company shall be properly documented and be proportionate to the nature, size, geographical presence, complexity of activities/structure, etc. of the Company. Further, the periodicity of risk assessment exercise shall be determined by the Board in alignment with the outcome of the risk assessment exercise. However, it should be reviewed at least annually, if required.
   3. The outcome of the exercise shall be put up to the Board and should be available to competent authorities and self-regulating bodies.
5. Risk Based Approach (RBA) for Mitigation and Management of the Risks

   The Company shall implement a Customer Due Diligence programme, having regard to the ML/TF risks identified and the size of business. Further, the Company shall monitor the implementation of the controls and enhance them, if necessary.

6. Nominations and Appointments

   The Board of Directors of the Company / any Committee of the Board are responsible for approving and implementing this Policy hereinafter detailed and to nominate officials of the Company as follows:

   1. Designated Director: The Board of Directors of the Company shall nominate a Designated Director to ensure overall compliance with the obligations imposed under Chapter IV of the Prevention of Money Laundering (PML) Act and the Rules made thereunder. The name, designation and address of the Designated Director shall be communicated to the Financial Intelligence Unit – India (FIU-IND). Further, the name, designation, address and contact details of the Designated Director shall also be communicated to the RBI. In no case, the Principal Officer of the Company shall be nominated as the 'Designated Director'.
   2. Principal Officer: The Board of Directors or the Designated Director of the Company shall appoint a Principal Officer who shall be responsible for ensuring compliance, monitoring transactions, and sharing and reporting information as required under the law / regulations. The name, designation and address of the Principal Officer shall be communicated to the FIU-IND. Further, the name, designation, address and contact details of the Principal Officer shall also be communicated to the RBI.
7. Compliance of the Policy

   The Company shall ensure compliance of this Policy by / through:

   1. Its Senior Management which includes Board of Directors, Chief Executive Officer (CEO) and Head – Credit & Risk.
   2. Allocating the responsibility for effective implementation of the Policy and its procedures.
   3. An independent evaluation of the compliance functions of the Policy and procedures, including legal and regulatory requirements.
   4. Concurrent / Internal Audit/ External Audit system to verify the compliance with Policy and procedures. Audit Report shall be submitted quarterly along with audit notes and compliance of this Policy to the Board of Directors / Audit Committee of the Company.

   The Company shall ensure that decision-making functions of determining compliance with KYC norms are not outsourced.

8. Scope

   The contents of this Policy shall always be read in conjunction / auto-corrected with the changes / modifications which shall be advised by RBI / other Authority from time to time. The Company may also formulate Standard Operating Procedures (SOPs) in addition to operational guidelines issued by RBI from time to time.

   The Company hereunder is framing the Policy incorporating the following key elements: (i) Customer Acceptance Policy (CAP);
   (ii) Customer Identification Procedures (CIP);
   (iii) Customer Due Diligence (CDD);
   (iv) Risk Management;
   (v) Monitoring of Transactions and Reporting to Financial Intelligence Unit (FIU-IND) – On-going Due Diligence.
   (vi) Record Management
   
   
   1. Customer Acceptance Policy (CAP)

      The Company shall ensure that:

      1. a) No loan account is opened in anonymous or fictitious / benami name(s).
      2. b) No loan account is opened where the Company is unable to apply appropriate CDD measures, either due to non-cooperation of the customer or non-reliability of the documents / information furnished by the customer. The Company shall consider filing an Suspicious Transaction Report (STR), if necessary, when it is unable to comply with the relevant CDD measures in relation to the customer.
      3. c) No transaction or account-based relationship is undertaken without following the CDD procedure.
      4. d) The mandatory information to be sought for KYC purpose while opening a loan account and during the periodic updation, is specified.
      5. e) ‘Optional’ / additional information, where such information requirement has not been specified in the Policy, is obtained with the explicit consent of the customer.
      6. f) It applies the CDD procedure at Unique Customer Identification Code (UCIC) level. Thus, if an existing KYC compliant customer of the Company desires to open another account, there shall be no need for a fresh CDD exercise.
      7. g) CDD Procedure is followed for all the co-applicants / joint account holders, while opening a joint loan account.
      8. h) Circumstances in which, a customer is permitted to act on behalf of another person/entity, is clearly spelt out.
      9. i) Suitable system is put in place to ensure that the identity of the customer does not match with any person or entity, whose name appears in the Sanctions Lists circulated by Reserve Bank of India.
      10. j) Where Permanent Account Number (PAN) is obtained, the same shall be verified from the verification facility of the issuing authority.
      11. k) Where an equivalent e-document is obtained from the customer, the Company shall verify the digital signature as per the provisions of the Information Technology Act, 2000.
      12. l) Where Goods and Services Tax (GST) details are available, the GST number shall be verified from the search/verification facility of the issuing authority.

      The Company shall ensure that the CAP shall not result in denial of banking/financial facility to members of the general public, especially those, who are financially or socially disadvantaged.

      Where the Company forms a suspicion of money laundering or terrorist financing, and it reasonably believes that performing the CDD process will tip-off the customer, it shall not pursue the CDD process, and instead file an STR with FIU-IND.

      Standard Operating Procedures (SOPs) for Customer Acceptance Policy (CAP), Customer Identification Procedure (CIP) and Customer Due Diligence (CDD) are outlined in Annexure I to the Policy.

   2. Customer Identification Procedure (CIP)

      The Company shall undertake identification of customers in the following cases:

      1. a) Upon commencement of an account-based relationship with the customer;
      2. b) When there is a doubt about the authenticity or adequacy of the obtained customer identification data;
      3. c) When the Company has reason to believe that a customer is intentionally structuring a transaction into a series of transactions below the threshold of Rupees Fifty Thousand.
      4. d) The Company shall ensure that there is no introduction being sought for the purposes of opening loan account(s).

      Standard Operating Procedures (SOPs) for Customer Acceptance Policy (CAP), Customer Identification Procedure (CIP) and Customer Due Diligence (CDD) are outlined in Annexure I to the Policy.

   3. Customer Due Diligence (CDD)

      The Company shall ensure appropriate CDD measures are applied at the time of commencement of account-based relationship with the customer and also ensure to apply measures to have on-going CDD based on the risk profile of every customer.

      For the Customer Due Diligence (CDD) done by a third party, the Company shall ensure that:

      1. a) Records or information of such customers’ due diligence carried out by the third party is obtained immediately from the third party or from the Central KYC Records Registry.

      2. b) Copies of identification data and other relevant documentations relating to the customer due diligence requirements are made available from the third party upon request without delay.

      3. c) The third party is regulated, supervised or monitored for, and has measures in place for, compliance with the CDD and record keeping requirements in line with the requirements and obligations under the PML Act.

      4. d) The third party is not based in a country or jurisdiction assessed as high risk.

      5. e) The ultimate responsibility for CDD and undertaking enhanced due diligence measures, as applicable, shall be with the Company.

      Standard Operating Procedures (SOPs) for Customer Acceptance Policy (CAP), Customer Identification Procedure (CIP) and Customer Due Diligence (CDD) are outlined in Annexure I to the Policy.

   4. Risk Management

      The Company shall have a risk based approach which includes the following:

      1. a) Customers shall be categorised as Low (Green Score), Medium (Yellow Score) and High (Red Score) risk category, based on the assessment and risk perception of the Company as per Credit Monitoring Policy of Company including parameters such as customer’s identity, social / financial status, nature of business activity, and information about the clients’ business and their location, geographical risk covering customers as well as transactions, type of products/services offered, delivery channel used for delivery of products/services, types of transaction undertaken – cash, cheque/monetary instruments, wire transfers, forex transactions, etc.
      2. b) While considering customer’s identity, the ability to confirm identity documents through online or other services offered by issuing authorities may also be factored in.
      3. c) The risk categorisation of a customer and the specific reasons for such categorisation shall be kept confidential and shall not be revealed to the customer to avoid tipping off the customer.
      4. d) The various other information collected from different categories of customers, for the purposes of risk management, is non-intrusive and the same shall be duly specified in the Policy / Credit Monitoring and Recovery Mechanism.
      5. e) Financial Action Task Force (FATF) Public Statement, the reports and guidance notes on KYC/AML issued by the Indian Banks Association (IBA), and other agencies, may also be used in risk assessment.
   5. Periodic Updation

      The Company shall adopt a risk-based approach for periodic updation of KYC ensuring that the information or data collected under CDD is kept up-to-date and relevant, particularly where there is high risk. However, the Company shall carry out periodic updation of KYC records at least once in every two years for high risk customers, once in every eight years for medium risk customers and once in every ten years for low risk customers from the date of opening of the account / last KYC updation.

      1. a) Individuals:
         
         1. i. No change in KYC information: In case of no change in the KYC information, a self-declaration from the customer in this regard shall be obtained through customer’s email-id registered with the Company or customer’s mobile number registered with the Company or letter, etc.
         2. ii. Change in address: In case of a change only in the address details of the customer, a self-declaration of the new address shall be obtained from the customer through customer’s email-id registered with the Company or customer’s mobile number registered with the Company or letter, etc. and the declared address shall be verified through positive confirmation within two months, by means such as address verification letter, contact point verification, deliverables, etc.

            Further, the Company, at its option, may obtain a copy of OVD or deemed OVD or the equivalent e-documents thereof, as defined in RBI Directions, for the purpose of proof of address, declared by the customer at the time of periodic updation.

      2. b) Customers other than individuals:
         
         1. i. No change in KYC information: In case of no change in the KYC information of the LE customer, a self-declaration in this regard shall be obtained from the LE customer through its email id registered with the Company or customer’s mobile number registered with the Company or letter, etc. from an official authorized by the LE in this regard, board resolution, etc. Further, the Company shall ensure during this process that Beneficial Ownership (BO) information available with them is accurate and shall update the same, if required, to keep it as up-to-date as possible.
         2. ii. Change in KYC information: In case of change in KYC information, the Company shall undertake the KYC process equivalent to that applicable for on-boarding a new LE customer.
      3. c) Additional measures: In addition to the above, the Company shall ensure that,
         1. i. The KYC documents of the customer as per the current CDD standards are available with them. This is applicable even if there is no change in customer information but the documents available with the Company are not as per the current CDD standards. Further, in case the validity of the CDD documents available with the Company has expired at the time of periodic updation of KYC, the Company shall undertake the KYC process equivalent to that applicable for on-boarding a new customer.
         2. ii. Customer’s PAN details, if available with the Company, is verified from the database of the issuing authority at the time of periodic updation of KYC.
         3. iii. Acknowledgment is provided to the customer mentioning the date of receipt of the relevant document(s), including self-declaration from the customer, for carrying out periodic updation. Further, it shall be ensured that the information / documents obtained from the customers at the time of periodic updation of KYC are promptly updated in the records / database of the Company and an intimation, mentioning the date of updation of KYC details, is provided to the customer.
         4. iv. In order to ensure customer convenience, the Company may consider making available the facility of periodic updation of KYC at any branch.
         5. v. The Company shall adopt a risk-based approach with respect to periodic updation of KYC.
      4. d) The Company shall advise the customers that in order to comply with the PML Rules, in case of any update in the documents submitted by the customer at the time of establishment of business relationship / account-based relationship and thereafter, as necessary; customers shall submit to the Company the update of such documents. This shall be done within 30 days of the update to the documents for the purpose of updating the records at Company’s end.
      5. e) In case of existing customers, the Company shall obtain the Permanent Account Number or equivalent e-document thereof or Form No. 60, by such date as may be notified by the Central Government, failing which the Company shall temporarily cease operations in the account till the time the Permanent Account Number or equivalent e-documents thereof or Form No. 60 is submitted by the customer.

         Provided that before temporarily ceasing operations for an account, the Company shall give the customer an accessible notice and a reasonable opportunity to be heard. Further, the Company may give appropriate relaxation(s) for continued operation of accounts for customers who are unable to provide Permanent Account Number or equivalent e-document thereof or Form No. 60 owing to injury, illness or infirmity on account of old age or otherwise, and such like causes. Such accounts shall, however, be subject to enhanced monitoring.

         Provided further that if a customer having an existing account-based relationship with the Company gives in writing to the Company that he does not want to submit his Permanent Account Number or equivalent e-document thereof or Form No.60, the Company shall close the account and all obligations due in relation to the account shall be appropriately settled after establishing the identity of the customer by obtaining the identification documents as applicable to the customer.

         Explanation – For the purpose of this clause, “temporary ceasing of operations” in relation an account shall mean the temporary suspension of all transactions or activities in relation to that account by the Company till such time the customer complies with the provisions of this clause. In case of asset accounts such as loan accounts, for the purpose of ceasing the operation in the account, only credits shall be allowed.

   6. Monitoring of Transactions and Reporting to Financial Intelligence Unit (FIU-IND) – On-going Due Diligence
      1. 8.6.1 Monitoring

         The Company shall undertake on-going due diligence of customers to ensure that their transactions are consistent with their knowledge about the customers, customers’ business and risk profile; and the source of funds/wealth, as per “Credit Monitoring and Recovery Mechanism” formulated by the Company.

      1. 8.6.2 Reporting
         1. i)The Company shall submit the following reports to the Director, FIU-IND by 15th day of the succeeding month:
            
            1. a) Cash Transaction Report (CTR) of all cash transactions of the value of more than ten lakh rupees or its equivalent in foreign currency.

               All series of cash transactions integrally connected to each other which have been valued below rupees ten lakhs or its equivalent in foreign currency where such series of transactions have taken place within a month and the monthly aggregate exceeds an amount of 10 lakh rupees or its equivalent in foreign currency shall also be reported.

            2. b) Counterfeit Currency Reports (CCR) of all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine or where any forgery of a valuable security or a document has taken place facilitating the transactions.
            3. c) Cross Border Wire Transfer Report (CBWTR) of the value of more than five lakh rupees or its equivalent in foreign currency where either the origin or destination of fund is in India.
         2. ii) The Company shall submit the Immovable Property Report (IPR) of all purchase and sale by any person of immovable property valued at fifty lakh rupees or more that is registered by the Company, as the case may be, to the Director, FIU-IND by 15th day of the month succeeding the quarter.
         3. iii) The Company shall also submit the Suspicious Transaction Report (STR) of all suspicious transactions whether or not made in cash to the Director, FIU-IND within 7 days on being satisfied that the transaction is suspicious.

            “Suspicious Transaction” means a ‘transaction’ as defined below, including an attempted transaction, whether or not made in cash, which, to a person acting in good faith:

            1. a) Gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the PML Act, regardless of the value involved; or
            2. b) Appears to be made in circumstances of unusual or unjustified complexity; or
            3. c) Appears to not have economic rationale or bona-fide purpose; or
            4. d) Gives rise to a reasonable ground of suspicion that it may involve financing of the activities related to terrorism.
               Explanation: Transaction involving financing of the activities relating to terrorism includes transaction involving funds suspected to be linked or related to, or to be used for terrorism, terrorist acts or by a terrorist, terrorist organization or those who finance or are attempting to finance terrorism.

            Broad categories of reason for suspicion and examples of suspicious transactions are indicated as under:

            Identity of client

            1. a) False identification documents
            2. b) Identification documents which could not be verified within reasonable time
            3. c) Accounts opened with names very close to other established business entities

            Background of client

            1. a) Suspicious background or links with known criminals

            Multiple accounts

            1. a) Large number of accounts having a common account holder, introducer or authorized signatory with no rationale
            2. b) Unexplained transfers between multiple accounts with no rationale

            Activity in accounts

            1. a) Unusual activity compared with past transactions
            2. b) Sudden activity in dormant accounts
            3. c) Activity inconsistent with what would be expected from declared business

            Nature of transactions

            1. a) Unusual or unjustified complexity
            2. b) No economic rationale or bonafide purpose
            3. c) Frequent purchases of drafts or other negotiable instruments with cash
            4. d) Nature of transactions inconsistent with what would be expected from declared business

            Value of transactions

            1. a) Value just under the reporting threshold amount in an apparent attempt to avoid reporting
            2. b) Value inconsistent with the client’s apparent financial standing

      2. 8.6.3 Manner of Reporting
         1. i) The Company shall follow the electronic reporting formats and comprehensive reporting format guide as prescribed by FIU-IND on its official website.
         2. ii) The Company shall put in place the robust software, which throw alerts when the transactions are inconsistent with the risk categorization and updated profile of the customers as a part of effective identification and reporting of suspicious transactions.
         3. iii) The Principal Officer of the Company shall furnish timely Reports/information referred above on the basis of information available with the Company. Delay of each day in not reporting a transaction or delay of each day in rectifying a mis-represented transaction beyond the specified time limit shall be constituted as a separate violation.
         4. iv) It shall be the duty of the Company, Designated Director, Officers and employees to observe the procedure and the manner of furnishing specified information.
         5. v) The Company shall maintain utmost confidentiality in filing of CTR and STR and its transmission.
         6. vi) Company shall not put any restriction on operation of the accounts where an STR has been filed. Further, it shall be ensured that there is no tipping off to the customer at any level.
         7. vii) The Company, its directors, officers, and all employees shall ensure that the fact of maintenance of records referred to in rule 3 of the PML (Maintenance of Records) Rules, 2005 and furnishing of the information to the Director is confidential.
      3. 8.7 Record Management

         The following steps shall be taken regarding maintenance, preservation and reporting of customer information, with reference to provisions of PML Act and Rules. The Company shall,

         1. 8.7.1 maintain all necessary records of transactions between the Company and the customer, both domestic and international, for at least FIVE years from the date of transaction;
         2. 8.7.2 preserve the records pertaining to the identification of the customers and their addresses obtained while opening the account and during the course of business relationship, for at least FIVE years after the business relationship is ended;
         3. 8.7.3 make available swiftly, the identification records and transaction data to the competent authorities upon request;
         4. 8.7.4 introduce a system of maintaining proper record of transactions prescribed under Rule 3 of Prevention of Money Laundering (Maintenance of Records) Rules, 2005;
         5. 8.7.5 maintain all necessary information in respect of the transactions prescribed under PML Rule 3 so as to permit reconstruction of individual transaction, including the following:
            1. a) The nature of the transaction(s);
            2. b) The amount of the transaction(s) and the currency in which it was denominated;
            3. c) The date of the transaction(s); and
            4. d) The parties to the transaction(s).
         6. 8.7.6 evolve a system for proper maintenance and preservation of account information in a manner that allows data to be retrieved easily and quickly whenever required or when requested by the competent authorities;
         7. 8.7.7 8.7.7 maintain records of the identity and address of their customer, and records in respect of transactions referred to in Rule 3 in hard or soft format.
            Explanation. – For the purpose of this clause, the expressions "records pertaining to the identification", “identification records”, etc., shall include updated records of the identification data, account files, business correspondence and results of any analysis undertaken

         The Company shall ensure that in case of customers who are non-profit organisations, the details of such customers are registered on the DARPAN Portal of NITI Aayog. If the same are not registered, the Company shall register the details on the DARPAN Portal. The Company shall also maintain such registration records for a period of FIVE years after the business relationship between the customer and the Company has ended or the account has been closed, whi chever is later.

9. Requirements/Obligations under International Agreements – Communications from International Agencies
   1. Obligations under the Unlawful Activities (Prevention) (UAPA) Act, 1967:
      1. (i) The Company shall ensure that in terms of Section 51A of the Unlawful Activities (Prevention) (UAPA) Act, 1967, it does not have any loan account in the name of individuals/entities appearing in the lists of individuals and entities, suspected of having terrorist links, which are approved by and periodically circulated by the United Nations Security Council (UNSC). The Company shall screen its customers against the following two lists:
         1. a) ISIL (Da’esh) & Al-Qaida Sanctions List: established and maintained pursuant to Security Council resolutions 1267/1989/2253, which includes names of individuals and entities associated with the Al-Qaida is available at https://scsanctions.un.org/ohz5jen-al-qaida.html.
         2. b) The “Taliban Sanctions List”, established and maintained pursuant to Security Council resolution 1988 (2011), which includes names of individuals and entities associated with the Taliban is available at https://scsanctions.un.org/3ppp1en-taliban.htm
      2. (ii) The Company shall also ensure to refer to the lists as available in the Schedules to the Prevention and Suppression of Terrorism (Implementation of Security Council Resolutions) Order, 2007, as amended from time to time. The aforementioned lists, i.e., UNSC Sanctions Lists and lists as available in the Schedules to the Prevention and Suppression of Terrorism (Implementation of Security Council Resolutions) Order, 2007, as amended from time to time, shall be verified on daily basis and any modifications to the lists in terms of additions, deletions or other changes shall be taken into account by the Company for meticulous compliance.
      3. (iii) The Company shall report details of loan accounts resembling any of the individuals/entities in the lists, to FIU-IND apart from advising Ministry of Home Affairs (MHA) as required under UAPA notification dated February 02, 2021.
      4. (iv) Freezing of Assets under Section 51A of UAPA, 1967: The procedure laid down in the UAPA Order dated February 2, 2021, shall be strictly followed and meticulous compliance with the Order issued by the Government shall be ensured. The list of Nodal Officers for UAPA is available on the website of MHA.
   2. Obligations under Weapons of Mass Destruction (WMD) and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 (WMD Act, 2005):
      1. a. The Company shall ensure meticulous compliance with the “Procedure for Implementation of Section 12A of the Weapons of Mass Destruction (WMD) and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005” laid down in terms of Section 12A of the WMD Act, 2005 vide Order dated September 1, 2023, by the Ministry of Finance, Government of India.
      2. b. In accordance with paragraph 3 of the aforementioned Order, the Company shall ensure not to carry out transactions in case the particulars of the individual / entity match with the particulars in the designated list.
      3. c. Further, the Company shall run a check, on the given parameters, at the time of establishing a relation with a customer and on a periodic basis to verify whether individuals and entities in the designated list are holding any funds, financial asset, etc., in the form of bank account, etc.
      4. d. In case of match in the above cases, the Company shall immediately inform the transaction details with full particulars of the funds, financial assets or economic resources involved to the Central Nodal Officer (CNO), designated as the authority to exercise powers under Section 12A of the WMD Act, 2005. A copy of the communication shall be sent to State Nodal Officer, where the account / transaction is held and to the RBI.
         It may be noted that in terms of Paragraph 1 of the Order, Director, FIU-India has been designated as the CNO.
      5. e. The Company may refer to the designated list, as amended from time to time, available on the portal of FIU-India.
      6. f. In case there are reasons to believe beyond doubt that funds or assets held by a customer would fall under the purview of clause (a) or (b) of sub-section (2) of Section 12A of the WMD Act, 2005, the Company shall prevent such individual/entity from conducting financial transactions, under intimation to the CNO by email, FAX and by post, without delay.
      7. g. In case an order to freeze assets under Section 12A is received by the Company from the CNO, the Company shall, without delay, take necessary action to comply with the Order.
      8. h. The process of unfreezing of funds, etc., shall be observed as per paragraph 7 of the Order. Accordingly, copy of application received from an individual/entity regarding unfreezing shall be forwarded by RE along with full details of the asset frozen, as given by the applicant, to the CNO by email, FAX and by post, within two working days.
   3. The Company shall verify every day, the ‘UNSCR 1718 Sanctions List of Designated Individuals and Entities‘, as available at https://www.mea.gov.in/Implementation-of-UNSC-Sanctions-DPRK.htm, to take into account any modifications to the list in terms of additions, deletions or other changes and also ensure compliance with the ‘Implementation of Security Council Resolution on Democratic People’s Republic of Korea Order, 2017’, as amended from time to time by the Central Government.
   4. In addition to the above, REs shall take into account – (a) other UNSCRs and (b) lists in the first schedule and the fourth schedule of UAPA, 1967 and any amendments to the same for compliance with the Government orders on implementation of Section 51A of the UAPA and Section 12A of the WMD Act.
   5. The Company shall undertake countermeasures when called upon to do so by any international or intergovernmental organisation of which India is a member and accepted by the Central Government.
   6. Jurisdictions that do not or insufficiently apply the FATF Recommendations
      1. a) The Company shall consider FATF Statements circulated by RBI from time to time, and publicly available information, for identifying countries, which do not or insufficiently apply the FATF Recommendations. REs shall apply enhanced due diligence measures, which are effective and proportionate to the risks, to business relationships and transactions with natural and legal persons (including financial institutions) from countries for which this is called for by the FATF.
      2. b) The Company shall give special attention to business relationships and transactions with persons (including legal persons and other financial institutions) from or in countries that do not or insufficiently apply the FATF Recommendations and jurisdictions included in FATF Statements.
         
         Explanation: The process referred to in a) & b) above do not preclude the Company from having legitimate trade and business transactions with the countries and jurisdictions mentioned in the FATF statement.
      3. c) The Company shall examine the background and purpose of transactions with persons (including legal persons and other financial institutions) from jurisdictions included in FATF Statements and countries that do not or insufficiently apply the FATF Recommendations, and shall retain written findings together with all documents and shall made available to RBI/other relevant authorities such findings/documents, on request.
   7. The Company may consider to leverage latest technological innovations and tools for effective implementation of name screening to meet the sanctions requirements.
10. Secrecy Obligations and Sharing of Information
    1. The Company shall maintain secrecy regarding the customer information which arises out of the contractual relationship between the Company and the customer.
    2. Information collected from customers for the purpose of opening of account shall be treated as confidential and details thereof shall not be divulged for the purpose of cross selling, or for any other purpose without the express permission of the customer.
    3. The Company shall satisfy itself, in case there is a request for data/information from Government and other Agencies, that the data/ information being sought is not of such a nature which will violate the provisions of the laws relating to secrecy in the transactions.
    4. The exceptions to the above rule shall be as under:
       1. (i) Where disclosure is under compulsion of law
       2. (ii) Where there is a duty to the public to disclose
       3. (iii) The interest of the Company requires disclosure
       4. (iv) Where the disclosure is made with the express or implied consent of the customer.
11. CDD Procedure and sharing KYC information with Central KYC Records Registry (CKYCR)
    1. (a) Government of India has authorised the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), to act as, and to perform the functions of the CKYCR vide Gazette Notification No. S.O. 3183(E) dated November 26, 2015.
    2. (b) In terms of provision of Rule 9(1A) of the PML Rules, the REs shall capture customer’s KYC records and upload onto CKYCR within 10 days of commencement of an account-based relationship with the customer.
    3. (c) Operational Guidelines for uploading the KYC data have been released by CERSAI.
    4. (d) The Company shall capture the KYC information for sharing with the CKYCR in the manner mentioned in the Rules, as per the KYC templates prepared for ‘Individuals’ and ‘Legal Entities’ (LEs), as the case may be. The templates may be revised from time to time, as may be required and released by CERSAI.
    5. (e) The Company is required to upload the KYC data pertaining to all new individual accounts and accounts of LEs with CKYCR in terms of the provisions of the Rules ibid. The KYC records have to be uploaded as per the LE Template released by CERSAI.
    6. (g) Once KYC Identifier is generated by CKYCR, the Company shall ensure that the same is communicated to the individual/LE as the case may be.
    7. (h) In order to ensure that all KYC records are incrementally uploaded on to CKYCR, REs shall upload/update the KYC data pertaining to existing accounts of individual customers and LEs at the time of periodic updation, or earlier, when the updated KYC information is obtained/received from the customer.
    8. (i) The Company shall ensure that during periodic updation, the customers are migrated to the current CDD standard.
    9. (j) Where a customer, for the purposes of establishing an account-based relationship, submits a KYC Identifier to the Company, with an explicit consent to download records from CKYCR, then the Company shall retrieve the KYC records online from the CKYCR using the KYC Identifier and the customer shall not be required to submit the same KYC records or information or any other additional identification documents or details, unless –
    10. i. there is a change in the information of the customer as existing in the records of CKYCR;
    11. ii. the current address of the customer is required to be verified;
    12. iii. the Company considers it necessary in order to verify the identity or address of the customer, or to perform enhanced due diligence or to build an appropriate risk profile of the client.
    13. iv. the validity period of documents downloaded from CKYCR has lapsed.
12. Introduction of New Technologies

    The Company shall identify and assess the Money Laundering (ML)/Terrorist Financing (TF) risks that may arise in relation to the development of new products and new business practices, including new delivery mechanisms, and the use of new or developing technologies for both new and pre-existing products.

    Further, the Company shall ensure:

    1. (a) to undertake the ML/TF risk assessments prior to the launch or use of such products, practices, services, technologies; and
    2. (b) adoption of a risk-based approach to manage and mitigate the risks through appropriate Enhanced Due Diligence (EDD) measures and transaction monitoring, etc.
13. Hiring and Training of Employees

    The Company shall put in place adequate screening mechanism, including Know Your Employee/Staff Policy as an integral part of their personnel recruitment/hiring process.

    The Company shall endeavour to ensure that the staff dealing with / being deployed for KYC/AML/CFT matters have: high integrity and ethical standards, good understanding of extant KYC/AML/CFT standards, effective communication skills and ability to keep up with the changing KYC/AML/CFT landscape, nationally and internationally. REs shall also strive to develop an environment which fosters open communication and high integrity amongst the staff.

    The Company shall conduct on-going employee training programme to ensure adequate training in KYC/AML/CFT Policy. The Company shall design different sets of trainings for frontline staff, compliance staff and staff dealing with new customers. The front desk staff shall be specially trained to handle issues arising from lack of customer education.

    The Company shall ensure proper staffing of the Audit function with persons adequately trained and well-versed in KYC/AML/CFT Policies of the Company, regulation and related issues.

Annexure-I

Standard Operating Procedures (SOPs)
Customer Acceptance Policy (CAP), Customer Identification Procedure (CIP) and Customer Due Diligence (CDD)

• I. Documents to be obtained

  Individuals	Sole Proprietary Firms	Companies	Firms	Trusts	Unincorporated Associations/ Body of Individuals*	Other Juridical Persons**
  A certified copy of an OVD containing details of his identity and address. ALONGWITH: One recent photograph Permanent Account Number (PAN) or Form No. 60 as defined in Income-Tax Rules, 1962, and Other documents pertaining to the nature of business or financial status specified by the Company in Application Form / Loan Agreement.	A certified copy of an OVD for establishing the identity and address of the individual proprietor. AND, any TWO of the following: Registration Certificate Certificate/ License issued by the municipal authorities under Shop and Establishment Act. Sales and income tax returns. CST/VAT/GST Certificate (Provisional/Final) Certificate/ registration document issued by Sales Tax/ Service Tax/ Professional Tax authorities. IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT/ License/ Certificate of practice issued in the name of the proprietary concern by any professional body incorporated under a statute. Complete Income Tax Return (not just the acknowledgement) in the name of the sole proprietor, reflecting the firms’ income duly authenticated/ acknowledged by the Income Tax Authorities. Utility bills such as electricity, water, telephone bills, etc. In case the Company is satisfied that it is not possible to furnish two such documents, the Company may, at its discretion, accept only one of those documents as proof of business/activity. Provided the Company undertake contact point verification and collect such other information and clarification as would be required to establish the existence of such firm, and shall confirm and satisfy itself that the business activity has been verified from the address of the proprietary concern.	One certified copy of each of the following: Certificate of Incorporation (COI) Memorandum and Articles of Association (MOA & AOA) Permanent Account Number (PAN) of the Company A resolution from the Board of Directors and power of attorney granted to its managers, officers or employees to transact on its behalf. Following documents of managers, officers or employees, as the case may be, holding an attorney to transact on company’s behalf: - Certified copy of any OVD - One recent photograph - Permanent Account Number (PAN) or Form No. 60 as defined in Income-Tax Rules, 1962	One certified copy of each of the following: Registration Certificate Partnership Deed Permanent Account Number (PAN) of the Partnership Firm Power of Attorney (POA/GPA) or Letter of Authority (LOA) in favour of any person, if the name of Managing Partner is not mentioned in the Partnership Deed. Following documents of the person, holding an attorney to transact on firm’s behalf: - Certified copy of any OVD - One recent photograph - Permanent Account Number (PAN) or Form No. 60 as defined in Income-Tax Rules, 1962	One certified copy of each of the following: Registration Certificate Trust Deed Permanent Account Number (PAN) of the trust Power of Attorney (POA/GPA) or Letter of Authority (LOA) in favour of any person, if the name of Managing Person is not mentioned in the Trust Deed. Following documents of the person, holding an attorney to transact on trust’s behalf:- Certified copy of any OVD - One recent photograph - Permanent Account Number (PAN) or Form No. 60 as defined in Income-Tax Rules, 1962	One certified copy of each of the following: Resolution of the managing body of such Association of Person (AOP) or Body of Individuals (BOI). Permanent Account Number (PAN) of AOP or BOI Power of attorney granted to transact on its behalf. Following documents of the person, holding an attorney to transact on behalf of AOP or BOI:- Certified copy of any OVD - One recent photograph - Permanent Account Number (PAN) or Form No. 60 as defined in Income-Tax Rules, 1962 Any other information/ documents, as may be required by the Company to establish the legal existence of such an association or body of individuals.	One certified copy of each of the following: Document showing name of the person authorised to act on behalf of the entity. OVD for the person holding power of attorney to transact on its behalf. Following documents of the person, holding an attorney to transact on its behalf:- Certified copy of any OVD - One recent photograph - Permanent Account Number (PAN) or Form No. 60 as defined in Income-Tax Rules, 1962 Any other information/ documents, as may be required by the Company to establish the legal existence of such an entity/ juridical person.

  * Unregistered Trust / Partnership Firm shall be included under the term ‘Unincorporated Association’.

  ** Other Juridical Persons may include Societies, Universities and Local Bodies like Village Panchayats, etc. not specifically covered in the earlier part.

  Note: List of required documents (mandatory and/or optional) shall be mentioned by the Company in the agreement(s) entered/to be entered into with the customer(s) or the facility documents and shall be intimated to the customer(s) as and when any additional document is required.
• II. Identification of Beneficial Owner

  For opening a loan account of a Legal Person who is not a natural person, the Company shall identify the beneficial owner(s) and also take all reasonable steps in term of Rule 9(3) of Prevention of Money Laundering (Maintenance of Records) Rules, 2005, to verify his/her identity keeping in view the following:

  • (a) Where the customer or the owner of the controlling interest is (i) an entity listed on a stock exchange in India, or (ii) it is an entity resident in jurisdictions notified by the Central Government and listed on stock exchanges in such jurisdictions, or (iii) it is a subsidiary of such listed entities; it is not necessary to identify and verify the identity of any shareholder or beneficial owner of such entities.
  • (b) In cases of trust/nominee or fiduciary accounts whether the customer is acting on behalf of another person as trustee/nominee or any other intermediary is determined. In such cases, satisfactory evidence of the identity of the intermediaries and of the persons on whose behalf they are acting, as also details of the nature of the trust or other arrangements in place shall be obtained.
• III. Enhanced Due Diligence (EDD) Measures
  Politically Exposed Persons (PEPs)

  The Company shall have the option of establishing a relationship with PEPs (whether as customer or beneficial owner) provided that, apart from performing normal customer due diligence :

  • 1. The Company have in place appropriate risk management systems to determine whether the customer or the beneficial owner is a PEP;
  • 2. Reasonable measures are taken by the Company for establishing the source of funds / wealth;
  • 3. Senior Management of the Company shall take a decision to open an account for a PEP, in accordance with its Customer Acceptance Policy.
  • 4. All PEP accounts shall be subjected to enhanced monitoring on an on-going basis.
  • 5. In the event of an existing customer or the beneficial owner of an existing account subsequently becoming a PEP, Senior Management’s approval shall be obtained to continue the business relationship.

  All of the above guidelines shall be applied to family members or close associates of PEPs .

• IV. Unique Customer Identification Code (UCIC)

  The Company shall allot a UCIC while entering into new relationships with individual customers as well as the existing customers.

• V. Sharing KYC Information with Central KYC Records Registry (CKYCR)

  The Company shall capture the KYC information for sharing with the CKYCR in the manner mentioned in the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, as required by the KYC templates prepared for ‘Individuals’ and ‘Legal Entities’ as the case may be.

  The Company shall follow the Operational Guidelines for uploading the KYC data released by Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI).

• VI. List of the Officially Valid Documents (OVDs)
  • 1. Passport
  • 2. Driving License
  • 3. Proof of Possession of Aadhaar Number
  • 4. Voter’s Identity Card issued by the Election Commission of India
  • 5. Job-Card issued by NREGA duly signed by an officer of the State Government
  • 6. Letter issued by National Population Register containing details of name and address
• VII. General Guidelines
  • 1. “Certified Copy of OVD” shall mean comparing the copy of Officially Valid Document (OVD) so produced by the customer with the original and recording the same on the copy by the authorised officer of the Company.
  • 2. Where the customer submits his proof of possession of Aadhaar Number as an OVD, he may submit it in such form as are issued by the Unique Identification Authority of India.
  • 3. The Company shall, where its customer submits his Aadhaar Number, ensure such customer to redact or blackout his Aadhaar Number through appropriate means where the authentication of Aadhaar Number is not required under section 7 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies Benefits and Services) Act.
  • 4. The Company shall use Aadhaar, proof of possession of Aadhaar etc., in accordance with the Aadhaar (Targeted Delivery of Financial and Other Subsidies Benefits and Services) Act, the Aadhaar and Other Law (Amendment) Ordinance, 2019 and the regulations made thereunder.
  • 5. The Company may carry out offline verification of a customer if he is desirous of undergoing Aadhaar offline verification for identification purpose.
  • 6. Where the OVD furnished by the customer does not have updated address, the following documents shall be deemed to be OVDs for the limited purpose of proof of address:
    • i) utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
    • ii) property or Municipal tax receipt;
    • iii) pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;
    • iv) letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation;
      The customer shall submit OVD with current address within a period of three months of submitting the documents specified above.
    • 7. where the OVD presented by a foreign national does not contain the details of address, in such case the documents issued by the Government departments of foreign jurisdictions and letter issued by the Foreign Embassy or Mission in India shall be accepted as proof of address.
    • 8. A document shall be deemed to be an OVD even if there is a change in the name subsequent to its issuance provided it is supported by a marriage certificate issued by the State Government or Gazette notification, indicating such a change of name.
    • 9. KYC verification once done by one branch/office of the Company shall be valid for transfer of the loan account to any other branch/ office of the Company, provided full KYC verification has already been done for the concerned loan account and the same is not due for periodic updation.
    • 10. If an existing KYC compliant customer of the Company desires to open another account, there shall be no need for a fresh CDD exercise.
• VIII. Operational Guidelines related to Payments
  • 1. Payment of cheques, drafts, pay orders, Banker’s cheques, if they are presented beyond the period of three months from the date of such instruments, shall not be made.
  • 2. The Company shall not collect account payee cheques for any person other than the payee constituent.
  • 3. The Company shall obtain PAN of customers and verify while undertaking transactions as per the provisions of Income Tax Rule 114B (as amended from time to time).
  • 4. The Company shall obtain Form-60 from the persons who do not have PAN.

Customer Due Diligence (CDD) Procedure
Part I - Customer Due Diligence (CDD) Procedure in case of Individuals

• 1. For undertaking CDD, the Company shall obtain the following from an individual while establishing an account-based relationship or while dealing with the individual who is a beneficial owner, authorised signatory or the power of attorney holder related to any legal entity:
  • (a) the proof of possession of Aadhaar number where offline verification can be carried out; or
  • (b) the proof of possession of Aadhaar number where offline verification cannot be carried out or any OVD or the equivalent e-document thereof containing the details of his identity and address; or
  • (c) the KYC Identifier with an explicit consent to download records from CKYCR; and
  • (b) the Permanent Account Number or the equivalent e-document thereof or Form No. 60 as defined in Income-tax Rules, 1962; and
  • (c) such other documents including in respect of the nature of business and financial status of the customer, or the equivalent e-documents thereof as may be required by the Company.:

  Provided that where the customer has submitted,

  • i) proof of possession of Aadhaar under clause (a) above where offline verification can be carried out, the Company shall carry out offline verification.
  • ii) an equivalent e-document of any OVD, the Company shall verify the digital signature as per the provisions of the Information Technology Act, 2000 and any rules issued thereunder and take a live photo as specified under Digital KYC Process mentioned under RBI Directions.
  • iii) any OVD or proof of possession of Aadhaar number under clause (b) above where offline verification cannot be carried out, the Company shall carry out verification through Digital KYC Process as specified under RBI Directions.
  • iv) KYC Identifier under clause (c) above, the Company shall retrieve the KYC records online from the CKYCR.
    Provided that for a period not beyond such date as may be notified by the Government for a class of REs, instead of carrying out digital KYC, the RE pertaining to such class may obtain a certified copy of the proof of possession of Aadhaar number or the OVD and a recent photograph where an equivalent e-document is not submitted.
    Explanation 1: RE shall, where its customer submits a proof of possession of Aadhaar Number containing Aadhaar Number, ensure that such customer redacts or blacks out his Aadhaar number through appropriate means where the authentication of Aadhaar number is not required.
    Explanation 2: The use of Aadhaar, proof of possession of Aadhaar etc., shall be in accordance with the Aadhaar (Targeted Delivery of Financial and Other Subsidies Benefits and Services) Act, 2016 and the regulations made thereunder.
• 2. KYC verification once done by one branch/office of the Company shall be valid for transfer of the account to any other branch/office of the Company, provided full KYC verification has already been done for the concerned account and the same is not due for periodic updation.

Part II - CDD Measures for Sole Proprietary firms

• 1. For opening an account in the name of a sole proprietary firm, CDD of the individual (proprietor) shall be carried out.
• 2. In addition to the above, any two of the following documents or the equivalent e-documents there of as a proof of business/ activity in the name of the proprietary firm shall also be obtained:
  • a. Registration certificate including Udyam Registration Certificate (URC) issued by the Government
  • b. Certificate/licence issued by the municipal authorities under Shop and Establishment Act
  • c. Sales and income tax returns
  • d. CST/VAT/ GST certificate
  • e. Certificate/registration document issued by Sales Tax/Service Tax/Professional Tax authorities
  • f. IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT or Licence/certificate of practice issued in the name of the proprietary concern by any professional body incorporated under a statute
  • g. Complete Income Tax Return (not just the acknowledgement) in the name of the sole proprietor where the firm's income is reflected, duly authenticated/acknowledged by the Income Tax authorities
  • h. Utility bills such as electricity, water, landline telephone bills, etc.
• 3. In cases where the Company is satisfied that it is not possible to furnish two such documents, the Company may, at its discretion, accept only one of those documents as proof of business/activity.
  Provided the Company undertakes contact point verification and collect such other information and clarification as would be required to establish the existence of such firm, and shall confirm and satisfy itself that the business activity has been verified from the address of the proprietary concern.

Part III- CDD Measures for Legal Entities

1. For opening an account of a company, certified copies of each of the following documents or the equivalent e-documents thereof shall be obtained:

• a. Certificate of incorporation
• b. Memorandum and Articles of Association
• c. Permanent Account Number of the company
• d. A resolution from the Board of Directors and power of attorney granted to its managers, officers or employees to transact on its behalf
• e. Documents, as specified for Individuals in Part I above, relating to beneficial owner, the managers, officers or employees, as the case may be, holding an attorney to transact on the company’s behalf
• f. the names of the relevant persons holding senior management position; and
• g. the registered office and the principal place of its business, if it is different.

2. For opening an account of a partnership firm, the certified copies of each of the following documents or the equivalent e-documents thereof shall be obtained:

• a. Registration certificate
• b. Partnership deed
• c. Permanent Account Number of the partnership firm
• d. Documents, as specified for Individuals in Part I above, relating to beneficial owner, managers, officers or employees, as the case may be, holding an attorney to transact on its behalf
• e. the names of all the partners and
• f. address of the registered office, and the principal place of its business, if it is different.

3. For opening an account of a trust, certified copies of each of the following documents or the equivalent e-documents thereof shall be obtained:

• a. Registration certificate
• b. Trust deed
• c. Permanent Account Number or Form No.60 of the trust
• d. Documents, as specified for Individuals in Part I above, relating to beneficial owner, managers, officers or employees, as the case may be, holding an attorney to transact on its behalf
• e. the names of the beneficiaries, trustees, settlor, protector, if any and authors of the trust
• f. the address of the registered office of the trust; and
• g. list of trustees and documents, as specified for Individuals in Part I above, for those discharging the role as trustee and authorised to transact on behalf of the trust.

4. For opening an account of an unincorporated association or a body of individuals, certified copies of each of the following documents or the equivalent e-documents thereof shall be obtained:

• a. Resolution of the managing body of such association or body of individuals
• b. Permanent Account Number or Form No. 60 of the unincorporated association or a body of individuals
• c. Power of attorney granted to transact on its behalf
• d. Documents, as specified for Individuals in Part I above, relating to beneficial owner, managers, officers or employees, as
  the case may be, holding an attorney to transact on its behalf and
• e. Such information as may be required by the RE to collectively establish the legal existence of such an
  association or body of individuals.
  Explanation: Unregistered trusts/partnership firms shall be included under the term ‘unincorporated association’.
  Explanation: Term ‘body of individuals’ includes societies.

5. For opening account of a customer who is a juridical person (not specifically covered in the earlier part) such as societies, universities and local bodies like village panchayats, etc., or who purports to act on behalf of such juridical person or individual or trust, certified copies of the following documents or the equivalent e-documents thereof shall be obtained and verified:

• a. Document showing name of the person authorised to act on behalf of the entity
• b. Documents, as specified for Individuals in Part I above, of the person holding an attorney to transact on its behalf and
• c. Such documents as may be required by the Company to establish the legal existence of such an entity/juridical person.
  Provided that in case of a trust, the Company shall ensure that trustees disclose their status at the time of commencement of an account-based relationship or when the Company has reason to believe that a customer is intentionally structuring a transaction into a series of transactions below the threshold of rupees fifty thousand.

1. How to log in a complaint/where can a complaint be made
   Any customer having a grievance/complaint/feedback with respect to the product and services offered by Auriolus Finvest Private Limited (hereinafter referred to as “Auriolus or” “Company”) including the issues relating to the services provided by the outsourced agencies, if any, engaged by Auriolus or the issues relating to updation/rectification of credit information submitted by Auriolus to Credit Information Companies (CICs), may write to the Company’s Customer Service Department through any of the following channels:
   
   Call our Customer Service Helpline 0124-4412620 / +91 9958871847
   
   Email- contactus@bizfunds.com
   
   Website : www.bizfunds.com/grievance-redressal.html
   Write to us-
   Plot No 88, Udyog Vihar, Phase IV, Gurugram, Haryana – 122015
   
   
2. Non-Discrimination
   The Company will not discriminate its customers on the basis of their gender, race, religion or disability (physical/visual) in addressing their grievances/complaints and will treat them fairly.
3. How a complaint should be made
   Customers are requested to necessarily provide necessary loan details i.e. Loan Account Number, Details of Feedback / Suggestion / Complaint and valid Contact Information including Phone No. & e-Mail ID while lodging communication with the Company.
4. When to expect a reply
   The Company shall endeavour to address/respond to all queries/grievances within reasonable time and keep the customer informed about the status of their complaints. Each customer query/complaint being unique in nature, may take up to 15 days for complete resolution after investigation.
5. Escalation to the Grievance Redressal Officer
   Customers are requested to first raise their concerns through any of channels mentioned above. In case of delayed or no response from the respective channel within 15 days or if the customer is not satisfied with the response received from Customer Service, such complaints/grievances may be escalated to the Grievance Redressal Officer of the Company whose details are as given below:
   
   Grievance Redressal Officer: Ms. Preeti Jain
   
   E-mail ID: grievanceredressal@bizfunds.com
   
   Telephone no.: 0124-4412620 / +91 9958871847
   
   Address: Plot No. 88, Udyog Vihar, Phase 4, Gurgaon, Haryana - 122015
   
   
6. Escalation to the Reserve Bank of India
   If the Customer does not receive any response from the Company within a period of thirty days or is dissatisfied with the response received, he/ she may approach the Reserve Bank of India at the following address:
   
   The General Manager,
   Department of Non-Banking Supervision,
   Reserve Bank of India,
   6, Parliament Street,
   New Delhi - 110001
   Ph. 011-23714456
   E-mail: dnbsnewdelhi@rbi.org.in
   
   
7. Escalation to the Consumer Education and Protection Cell (CEPC)
   If the Company fails to send updated credit information to the CICs on receipt of request for updation/rectification of credit information submitted by Auriolus within a period of twenty-one (21) days, the customer may approach the Consumer Education and Protection Cell (CEPC) functioning from the Regional Offices (ROs) of Reserve Bank of India.

1. Introduction
   Pursuant to Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 dated October 19, 2023 read with Fair Lending Practice - Penal Charges in Loan Accounts dated August 18, 2023 (as may be amended from time to time), the Board of Directors of Auriolus Finvest Private Limited (hereinafter the “Company”) has adopted the following internal Guidelines, Policies, Procedures and Interest Rate Model (hereinafter the “Policy”).
2. Objectives of the Policy
   To determine interest rates, processing and other charges to be charged for loans and advances and matters relating thereto keeping in view the RBI guidelines and good governance practices.
3. Application of the Policy
   This Policy is applicable to all categories of products and services offered (currently offered or which may be introduced at a future date) by the Company.
4. Factors
   While determining Rate of Interest, Processing Fees and other Charges, the Company considers inter alia the following factors:
   

   a) Cost Factors which will include Cost of Funds / Borrowing, Fixed & Variable Transaction Costs to the Company

   b) Margin for the Company for maintaining stakeholders’ expectations for a reasonable and market competitive rate of return

   c) Risk Premium which will include the following:

   • Inherent credit and default risk in the business
   
   • Risk Premium attached with a Customer based on financial positions, stability in earning, credit reports, past repayment track record, Customer relationship, market reputation, compliance record and future business potential etc.
   
   • Nature and value of securities offered by Customers
   
   • Prevailing Competitive, Economic and Financial scenario
   
   
5. Rate of Interest, Processing Fees and other Charges
   
   1. The Company has adopted a risk-based approach for classification of Customers for determining applicable rate of interest, which differs for each Customer based on risk factors mentioned above. Hence, the rate of interest and other fees / charges for the same product and tenure availed during same period by different Customers cannot be standardized.
   2. The Company will not charge interest more than 24% per annum. The Company shall not introduce any additional component to the rate of interest.
   3. The penal charges for the reasons detailed in the respective agreement with the customers will be up to 24% per annum over and above the normal rate of interest for the overdue period. The quantum of penal charges shall be reasonable and commensurate with the non-compliance of material terms and conditions of loan contract without being discriminatory within a particular loan / product category. Whenever reminders for non-compliance of material terms and conditions of loan are sent to borrowers, the applicable penal charges shall be communicated. Further, any instance of levy of penal charges and the reason therefor shall also be communicated to the customer.
   4. The Company may also charge prepayment/foreclosure charges up to 3% of the prepaid/foreclosed amount.
   5. The Company will charge the Processing Fee (non- refundable) from 0% to 2.5% of the sanctioned loan facility based on the quantum of work involved in credit appraisal, reference checks with credit bureaus, volume of documentation involved and incidental expenses involved in the transaction.
   6. The Company will charge cheque / NACH return charges up to INR 500/- per instance plus applicable taxes.
   7. The Company will charge Deferment Cost for the deferment of presentation of NACH Mandate up to INR 2000/- payable upfront for each Deferment Request.
   8. Other fees / charges such as RTGS/other remittance charges, re-scheduling charges, charges for issue of account statement, no dues certificate etc. would be levied by the Company wherever considered necessary.
   9. Besides above fees / charges, Government Fees (on actual basis) plus applicable taxes shall be payable by the Customers.
   10. In case of multiple disbursements in respect of the same loan account, the rates of interest would be subject to review and the same may vary according to the prevailing rate at the time of successive disbursements or as may be decided by the Company.
   11. The rate of interest will be annualised rate so that the Customer is aware of the exact rates that would be charged to the account.
   12. The rate of interest and other charges offered by the Company are indicative and the Company reserves the right to charge differential rates for certain Customers based on risk factors, market and other conditions at the sole discretion of the Company subject to maximum 26% per annum.
   13. The applicable rate of interest and other fees / charges would be communicated explicitly in the Sanction Letter / Loan Agreement.
   14. Claims for refund or waiver of fees / charges / penal charges would normally not be entertained by the Company and it is at the sole and absolute discretion of the Company to deal with such requests.
   15. The Company shall, at the time of disbursal, ensure that the interest rate and other fees / charges on loan and advances are in strict adherence to this Policy.
   16. The rate of interest and other fees / charges are subject to change. Changes in the rate of interest and other fees / charges would have a prospective effect and intimation of change of interest or other charges would be communicated to the Customers.
6. Publication
   This Policy shall be displayed at all our offices and published on the website of the Company for the information of various stakeholders.
7. Review
   The Board of Directors of the Company may from time to time review/modify this Policy as considered necessary.

• Introduction
  Pursuant to provisions of 'COVID-19 – Regulatory Package' issued by Reserve Bank of India (RBI) vide its Notification DOR.No.BP.BC.47/21.04.048/2019-20 dated March 27, 2020 and further extension thereto vide its Notification DOR.No.BP.BC.71/21.04.048/2019-20 dated May 23, 2020 , the lending institutions are permitted to grant a moratorium of three months on payment of all instalments falling due between March 1, 2020 and May 31, 2020 and further extension thereto from June 1, 2020 to August 31, 2020. Instalments will include the following payments falling due from March 1, 2020 to May 31, 2020 and further extension thereto from June 1, 2020 to August 31, 2020: (i) principal and/or interest components; (ii) bullet repayments; (iii) Equated Monthly instalments; (iv) credit card dues.
  
  The lending institutions are required to frame board approved policy for providing relief under the said notification. In accordance with the said Notification, Auriolus Finvest Private Limited (hereinafter referred to as the “Company” or “BizFunds”) has framed a ‘Policy for granting Moratorium’ on the credit facilities granted by the Company to eligible borrowers.
  
  The borrowers who are willing to opt for the moratorium on the credit facility granted by the Company under their respective Credit Facility Agreements may refer the below mentioned Frequently Asked Questions (FAQs) which defines the scope and manner of granting moratorium by the Company as per aforesaid Notification.
  
  

• FREQUENTLY ASKED QUESTIONS

1. What is the moratorium scheme?
   The Reserve Bank of India (RBI) has issued COVID-19 – Regulatory Package notification, dated March 27, 2020 (“RBI Notification”) whereby it has allowed the lending institutions to allow moratorium to their borrowers up to 3 months (beginning from 1st March 2020 to 31st May 2020) which was further extended from June 1, 2020 to August 31, 2020 vide Notification dated May 23, 2020. In accordance with the said RBI Notification, BizFunds would extend moratorium to all such eligible borrowers who opts for it.
2. Which amounts are covered under moratorium?
   The moratorium shall cover all unpaid principal and interest amounts falling due between March 1, 2020 and May 31, 2020 (further extended from June 1, 2020 to August 31, 2020) in respect of credit facilities availed by the borrower from BizFunds under credit facility agreements.
3. Whether interest chargeable during the moratorium period?
   In line with RBI guidelines, BizFunds will continue to charge interest during the period of moratorium. The interest charged for every month shall be added to the next month’s outstanding and will be subject to further interest thereon. This interest accrued during the moratorium period shall need to be paid by the borrower at the end of the moratorium period i.e., 31st August 2020.
4. Is it compulsory for every customer or shall it apply automatically?
   It is not compulsory, eligible borrowers are free to exercise their discretion and decide whether they want to opt for it or not.
   
   Similarly, the moratorium scheme shall not apply automatically. Borrowers who are eligible and wants to opt for moratorium shall be required to make a written request/ application at the following email, along with a copy of your bank statements of past three months:
   repayments@bizfunds.com
5. What are the eligibility criterion to apply for moratorium?
   The borrowers who fulfil the following conditions shall be eligible for the moratorium:
   
   
   1. Having an outstanding under the availed credit facility which fall due between March 2020 and May 2020 (further extended from June 1, 2020 to August 31, 2020);
   2. Borrower’s account has not been declared as NPA prior to 1st March 2020 or under a process of settlement;
   3. No outstanding overdues related to period prior to 1st March 2020 shall be covered under moratorium;
   4. Outstanding overdues related to period prior to 1st March 2020 will be reported to Credit Bureau and RBI as per IRAC (Income Recognition and Asset Classification) norms;
   5. There should not have been any default or breach by the borrower of the terms of the credit facility agreement executed with BizFunds; and
   6. There should be an adverse impact of COVID-19 on the cash flow on the borrower resulting into financial distress and its inability to make payments.
   Borrowers are advised to clear their outstanding dues or default pertaining to the period prior to March 01, 2020, for which the extant IRAC and provisioning norms shall apply.
   
   Moratorium shall be granted by BizFunds to a borrower only if it has been found eligible and BizFunds reserves the right to require any information (including bank statements) of the borrowers to evaluate the eligibility and application.
   
   If a borrower who has made an application for moratorium is not found to be eligible by BizFunds, the borrower will have to pay the due outstanding amounts as per the contractual terms agreed under its credit facility agreement executed with BizFunds. In such cases, any delay in payment shall get reported to the credit bureau as non-repayment of the contracted loan.
6. By when can a borrower apply for a moratorium and in how many days the application of moratorium shall be responded?
   The moratorium application should be submitted at least 5 working days prior to an amount falling due during the period 1st March 2020 to 31st May 2020 (further extended from June 1, 2020 to August 31, 2020).
   
   BizFunds team will communicate (in writing) its decision on the borrower’s eligibility and status of application for moratorium within 3 working days from the date it receives the application.
7. Whether availing moratorium will impact credit score?
   In line with RBI guidelines, the moratorium on payments will not qualify as a default for the purposes of reporting to Credit Information Companies (CICs)/credit during the moratorium period.
   
   However, any delay in the payment of these dues after completion of the moratorium period shall be reported to the Credit Information Companies (CICs) or credit bureau and would thereby impact the credit score. Overdue payments related to period prior to 1st March 2020 shall also be subject to be reported to CICs.

Public Notice regarding change in Management