1. Purpose and scope
This policy sets out the framework [NBFCNAME] follows to prevent its products and services from being used, knowingly or otherwise, for money laundering or the financing of terrorism. It applies to every officer and employee of [NBFCNAME], to all business conducted under the LakshayCash brand, and to every agent, vendor or service provider acting on its behalf.
The policy covers customer acceptance, customer due diligence, risk categorisation, monitoring of transactions, reporting to the Financial Intelligence Unit, record keeping, training and internal review.
2. Regulatory framework
This policy is framed under the Prevention of Money Laundering Act, 2002 and the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, and gives effect to the Reserve Bank of India Master Direction on Know Your Customer as applicable to non-banking financial companies, together with the Unlawful Activities (Prevention) Act, 1967 in respect of sanctions screening.
Where this policy and any applicable law, regulation or direction differ, the law, regulation or direction prevails. This policy is read alongside our Privacy Policy, Fair Practice Code and Grievance Redressal Policy.
3. Customer Acceptance Policy
[NBFCNAME] will not establish or continue a relationship in the following circumstances:
- Where the customer is anonymous, uses a fictitious name, or declines to provide the information and documents required for due diligence.
- Where identity cannot be verified, or where the documents provided are found to be false, forged or unreliable.
- Where the customer, or any beneficial owner behind the customer, appears on a sanctions list notified under the Unlawful Activities (Prevention) Act, 1967 or on the United Nations Security Council consolidated list.
- Where the source of funds cannot be established to our satisfaction, or the stated purpose of the loan is inconsistent with the customer's profile.
- Where the relationship would expose [NBFCNAME] to a level of money laundering or terrorist financing risk it is not equipped to manage.
No account is opened in a benami or fictitious name. A decision to decline a relationship is recorded with reasons, and the customer is not informed of any suspicion that may have led to it.
4. Customer Due Diligence
Identification and verification
Every customer is identified and verified before a loan is sanctioned, using an Officially Valid Document together with a recent photograph and the Permanent Account Number or Form 60. Identification data is verified against the issuing authority or database wherever such verification is available.
Aadhaar
Where Aadhaar is used, it is used only in the manner permitted by law and with the customer's explicit consent. The first eight digits are redacted, the number is not stored, and the consent recorded is the one set out on our Aadhaar Consent page.
Beneficial ownership
Where a customer is not a natural person, the beneficial owners are identified and reasonable steps are taken to verify their identity, along with the ownership and control structure of the entity.
Enhanced due diligence
Enhanced due diligence is applied where risk is assessed as high. This includes politically exposed persons and their relatives and close associates, customers whose profile or transactions lack an apparent economic rationale, relationships conducted entirely at a distance without adequate safeguards, and any case where the ordinary level of diligence leaves material questions unanswered. Enhanced due diligence includes establishing the source of funds and obtaining senior management approval to begin or continue the relationship.
5. Risk categorisation and periodic updation
Every customer is assigned a risk category of low, medium or high, based on identity, social and financial standing, the nature of the business activity, the stated purpose of the loan, the expected pattern of transactions and the geography involved. The category is reviewed when new information comes to light.
Know Your Customer records are updated periodically: at least once every two years for high risk customers, once every eight years for medium risk customers, and once every ten years for low risk customers, or at such intervals as the Reserve Bank of India may prescribe from time to time. The risk categorisation of a customer and the reasons for it are treated as confidential and are not disclosed to the customer.
6. Monitoring of transactions
Transactions are monitored on an ongoing basis so that patterns inconsistent with a customer's known profile, or without an apparent lawful purpose, can be identified and examined. Particular attention is paid to complex transactions, unusually large transactions, transactions that do not fit the customer's stated occupation or income, repayments from accounts unconnected to the customer, and attempts to avoid reporting thresholds by breaking a transaction into parts.
Where examination raises a suspicion, the matter is escalated to the Principal Officer, the findings are recorded in writing, and the record is retained.
7. Reporting to the Financial Intelligence Unit
[NBFCNAME] furnishes the following reports to the Director, Financial Intelligence Unit - India, in the form and within the timelines prescribed under the Prevention of Money Laundering (Maintenance of Records) Rules, 2005:
- Cash Transaction Reports, covering cash transactions above the prescribed threshold and series of integrally connected cash transactions that aggregate above it within a calendar month.
- Suspicious Transaction Reports, covering transactions where there are reasonable grounds to suspect proceeds of crime or terrorist financing, whether or not the transaction was completed.
- Counterfeit Currency Reports, covering the use of forged or counterfeit currency notes.
- Non-Profit Organisation Transaction Reports, where applicable to the relationship.
A Suspicious Transaction Report is filed on the basis of reasonable grounds for suspicion, regardless of the amount involved. No employee may disclose to a customer or to any other person that a report has been made or is being considered. Such disclosure is an offence.
8. Record keeping
Records of all transactions are maintained for at least five years from the date of the transaction. Records of the identity of customers and their beneficial owners, together with account files and business correspondence, are maintained for at least five years after the business relationship ends or the account is closed, whichever is later. Records are maintained in a form that permits them to be reconstructed and made available to the competent authority on request.
9. Sanctions screening
Customers and beneficial owners are screened at onboarding and on an ongoing basis against the lists of designated individuals and entities notified under the Unlawful Activities (Prevention) Act, 1967 and against the United Nations Security Council consolidated list. Where a match is found, the relationship is not established or is frozen as required, and the matter is reported to the authorities without delay.
10. Governance
Designated Director
The Designated Director is responsible for ensuring overall compliance with the obligations imposed under Chapter IV of the Prevention of Money Laundering Act, 2002 and the rules made under it.
Designated Director
[DESIGNATED_DIRECTOR]
Principal Officer
The Principal Officer is responsible for monitoring and reporting transactions, for furnishing information to the Financial Intelligence Unit, and for acting as the point of contact for the regulator on matters covered by this policy.
Principal Officer
[PRINCIPAL_OFFICER]
Phone
11. Training and hiring
Employees receive training on this policy on joining and at regular intervals afterwards, covering their obligations, the indicators of suspicious activity, the escalation route and the prohibition on tipping off. Training is tailored to the role, with staff in customer-facing and transaction-monitoring roles receiving the fullest coverage. Screening procedures are applied at hiring to ensure high standards among employees.
12. Internal audit and review
Compliance with this policy is tested independently as part of the internal audit programme, and findings are reported to senior management and to the Board. This policy is reviewed at least once a year, and additionally whenever there is a material change in law, regulation, business model or risk profile.
13. Contact
Questions about this policy may be sent to [AML_EMAIL]. Complaints about the conduct of [NBFCNAME] or its representatives should be raised through our grievance redressal process.