Preamble

Money laundering is a serious threat to the financial system of countries across the world both developed and underdeveloped and growing economies like India. It is also potential threat to integrity and sovereignty countries. To combat this criminal act of money laundering in interconnected economy, the Financial Action Task Force on money laundering (FATF) was established by G-7 summit in Paris. FATF recommendations set out the basic framework for anti-money laundering efforts and were designed with universal application in mind. The Basel committee on banking supervision issued its statement of criminal use of the banking system for the purpose of money laundering.

In India, the Central Government vide its notification no GSR 436(E), dated 1.7.2005 enacted Prevention of Money Laundering into apparently legal money either directly or indirectly and curb the threat to banks and financial institutions. Thereafter, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and National Housing Bank (NHB) have also issued guidelines (collectively referred to as “guidelines” applicable, to ensure that a proper policy framework is formulated and put in place. The PMLA and the guidelines also cast an obligation on banking companies, financial institutions and intermediaries now identified as reporting entities, to ensure compliance.

Need for the Policy

It will be ALTUM CREDO’s endeavor to arrest flow of funds through its business activity towards money laundering and terrorism financing. To ensure that ALTUM CREDO is not used as a vehicle for money laundering and terrorism financing, ALTUM CREDO has undertaken to frame this policy.

The main objective of this policy is:

   To establish and lay down the general framework for identification and acceptance of customers through documentary and other means and to act as deterrent against money laundering, terrorism financing and assist law enforcement agencies in this regard;

   To ensure compliance with the PMLA, amendments, rules thereunder and the guidelines in force from time to time;

   To protect its reputation, values and ethics;

   To lay down compliance norms for the employees.

Risk involved in the event of non-compliance of the Act, Rules and Guidelines:

ALTUM CREDO is aware that it is exposed to several risks such as Operational, Legal, Compliance, Business & Financial Risks if appropriate anti money laundering measures and/or proper framework are not established. In terms of the KYC norms and as per Section 12 of The Prevention of Money Laundering (Amendment) Act, 2012 the Company (reporting entity) is inter alia required to comply with the obligations detailed as under:

  1. Maintain record of all transactions, including information relating to attempted transactions, in such manner so as to enable it to reconstruct individual transactions
    1. Furnish to the Director – Financial Intelligence Unit – India (FIU-IND), within such time as may be prescribed, information relating to such transactions, whether attempted or executed
    2. Verify the identity of all its customers;
    3. Identify the beneficial owner, if any, of such of its customer; and
    4. Maintain record of documents evidencing identity of its customers and beneficial owners as well as account files and business correspondence relating to customers
  2. Ensure confidentiality of every information maintained, furnished or verified, save as otherwise provided under any law
  3. Maintain records referred to in clause (1) above for a period of five years from the date of transaction between a customer and the company.
  4. Maintain records referred to in clause (d) above for a period of five years after the business relationship between a customer has ended or the account has been closed, whichever is later.
Appointment of Designated Director

The Managing Director or Whole time Director of ALTUM CREDO duly authorized by Board to be been appointed as the Designated Director in compliance of Rule 2(ba) of the Maintenance of Records Rules of the PMLA. The Final responsibility lies with the Designated Director to ensure overall compliance with the obligations imposed under Chapter 4 of the Act and the Rule/ Regulations thereunder. The designated director will ensure implementation and compliance of the policy framed from time to time.

Appointment of Compliance Officer/Principal Officer

The person directly reporting to the Designated Director of ALTUM CREDO to be appointed as the Principal Officer in compliance of Rule 2(f) of the Maintenance of Records Rules of the PMLA. The Principal Officer under the supervision and guidance of the Designated Director shall be responsible to ensure overall compliance with the obligations thereunder.

The Designated Director and Principal Officer will, inter-alia be responsible for:

   Implementing the policy by drawing up the procedures

   Co-ordinating within the organisation at different levels for monitoring the compliance of the policy and procedures on KYC and AML.

   Updating / Modifying the policy with change in laws and regulation with the Boards approval.

   Allocating duties and responsibilities to ensure implementation and compliance of the policy framed.

   Training and dissemination of information concerning guidelines and other rules and regulations on KYC and AML and updating staff/ customers of the changes from time to time

   Reporting status on the compliance of the KYC norms to the Board

Know Your Customer – (KYC) guidelines and Anti Money Laundering Standards (AML) at ALTUM CREDO

The objective of KYC and AML policy of ALTUM CREDO is to prevent ALTUM CREDO from being used intentionally, or unintentionally, by criminal elements for laundering activities or terrorism financing. KYC and AML procedures will also enable ALTUM CREDO to know/understand ALTUM CREDO’s customers and their financial dealing better, which in turn will to manage the risks prudently.

The process of KYC and prevention of Money Laundering will be implemented through the following procedures:

  1. Customer Identification Procedures;
  2. Customer Acceptance Policy;
  3. Risk classification of customer profile and reporting to appropriate authority
Customer Identification Procedure (CIP)

The PMLA and read with Rule 9 of The Prevention of Money-Laundering (Maintenance of records) Rules, 2005 inter alia requires HFC to identify its clients, verify their identity and obtain information on the purpose and intended nature of the business relationship. It also provides that HFCs shall identify the beneficial owner and take all reasonable steps to verify his identity

The objective of establishing the identification of the customers is to:

   Verify the status of the customer (legal status of legal customer/ entity) through proper and relevant documents.

   Verify that any person purporting to act on behalf of the customer, legal person/entity is so authorized. Verify the identity of such an authorized person.

   Understand the ownership and control structure of the customer and determine who are the natural persons who ultimately have control over management.

The following factors shall take into account whilst framing norms relating to CIP.

   The document(s) for verifying and establishing the identity of the customer or Referral Associates shall be those as prescribed by the FIU-IND/ Regulator(s), from time to time.

   The document(s) accepted for verifying and establishing the identity of the customer shall be latest.

   All document(s) accepted as part of CIP, must be attested by the customer and counter signed by the concerned officer with his name/ employee number on such documents.

The Customer Identification Procedure shall be carried out by verifying Identity of customer and Residence Proof of customer. The designated director/ principal officer shall draw up the list of documents to be verified and collected for this purpose at the time of establishing a relationship with custom not in regular nature of business.

The Customer Identification Procedure is to be carried out at the following stages i.e.

While establishing a relationship

In case of a customer who intends to avail a loan, at the time the duly completed application form along with the processing fees is received from the prospective borrower.

While carrying out a financial transaction

In case of a borrower, a financial transaction is said to have been carried out at the time of disbursing the first disbursement.

Customer Acceptance Policy (CAP)

ALTUM CREDO would verify the identity of the customer with proper adherence to Customer Identification procedure before accepting duly completed application form for placement of deposit, issuing a sanction letter to a loan borrower. ALTUM CREDO would accept customers only after verifying his/ her/ their identity with valid documents as prescribed by the FIU-IND/ Regulator(s), from time to time. ALTUM CREDO shall endeavor that no account is opened in anonymous or fictitious / benami name(s). ALTUM CREDO shall also endeavor that no account is opened of a customer who has a criminal record or whose names is in the list of banned entities or list of terrorist individual/ organizations under UNSCR. The Designated Director/ Principal Officer shall issue necessary guidelines to the retail offices in this regard so as to ensure that the relevant documents are taken so as to satisfy that no account is opened in anonymous or fictitious / benami name(s).

Further, as per the PLMA guidelines, if in case, the customer does not provide full information for Customer Identification and Customer acceptance within 45 days of opening of the account, then ALTUM CREDO would retain the right to close the account.

Risk Classification of Customer Profiles

ALTUM CREDO shall carry out risk assessment to identify, assess and take effective measures to mitigate its money laundering and terrorism financing risks for clients, countries, geographic areas, and products, services, transactions or delivery channels that is consistent with any national risk assessment conducted by a body or an authority duly notified by the Central Government.

The information available from the customers to prove their identity and residence will determine the risk perception. However, for proper risk assessment of business relationship with customers, the customers are broadly classified as Low risk, Medium Risk and High Risk, based on the risk perceived. Low risk customers shall be those whose identity and source of wealth can be easily identified, while high risk will be those who will have to be subjected to additional due diligence.

Identification of class of Customers under various risk categories:

   Low Risk:
Accounts of the following customers are categorized as Low Risk Profile Customers:
Resident individuals.
Salaried employee with well-defined salary structure.
Employees of Government Departments, Government Owned Companies, Regulatory and Statutory Bodies.

   Medium Risk:
Accounts of the following customers is categorized as Medium Risk Profile Customers:
Private Limited Companies
Partnership Firms
LLPs

   High Risk:
Accounts of the following customers is categorized as High-Risk Profile Customers:

  1. non-resident customers,
  2. high net worth individuals,
  3. trusts, charities, NGOs and organizations receiving donations,
  4. companies having close family shareholding or beneficial ownership,
  5. firms with ‘sleeping partners’,
  6. politically exposed persons (PEPs) of foreign origin,
  7. non-face to face customers, and
  8. those with dubious reputation as per public information available, etc.
Monitoring of Transactions, Maintenance and Preservation of records

ALTUM CREDO shall monitor and also maintain a record of a transaction of the loan accounts where there has be receipt or payment in cash exceeding Rs. 10 lakh per transaction; and also monitor and maintain record of deposits and loan accounts where there has been a series of cash transactions from the same customer during the month exceeding 10 lakhs.

ALTUM CREDO shall maintain proper record of transactions as prescribed under Rule 3, of the Prevention of Money-Laundering (Maintenance of the Records) Rules, 2005)

ALTUM CREDO shall also maintain the record of all transactions including, the records of:

   all cash transactions of the value of more than rupees ten lakh or its equivalent in foreign currency;

   all series of cash transactions integrally connected to each other which have been individually valued below rupees ten lakh 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 ten lakh rupees; ALTUM CREDO does not deal in cash for any of its business transactions except in recoveries of difficult borrower accounts. Therefore, ALTUM CREDO does not foresee any situation where any business transaction shall be carried out in cash in excess of Rs. 10 Lakh, or more.

   all transactions involving receipts by non-profit organizations of rupees ten lakh or its equivalent in foreign currency;

   all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine and where any forgery of a valuable security or a document has taken place facilitating the transaction;

   all suspicious transactions whether or not made in cash.

   all cross-border wire transfers of the value of more than Five Lakh rupees or its equivalent in foreign currency whether either original or destination of fund is in India.

   All purchase and sale by any person of immovable property valued at Fifty lakh rupees or more that is registered by the ALTUM CREDO

The records referred to above shall contain all necessary information including the following information:

   The nature of the transactions

   The amount of the transaction and the currency in which it was denominated;

   The date on which the transaction was conducted;

   The parties to the transaction.

Storage & Retrieval of documents/ data:

ALTUM CREDO would maintain for at least five years from the date of transaction between ALTUM CREDO and the customer, all necessary records of the transactions, both domestic or international which will permit reconstruction of individual transactions so as to provide, if necessary, evidence for prosecution of person involved in criminal activity.

ALTUM CREDO would also ensure that records pertaining to the identification of the customer or beneficial owner and his address while opening account and during the course of business relationship are properly preserved for at least five years after the business relationship is ended or the account has been closed. The identification records and transaction data will be made available to the competent authorities upon request.

Internal Audit

An independent evaluation of the controls of identifying high value transaction / suspicious transaction will be carried out on a regular basis by the internal auditors of ALTUM CREDO.

Internal auditors will be assigned the responsibility to specifically scrutinize compliance of KYC norms and AML standards and comment on the effectiveness measures taken by branches in adoption of KYC norms and report lapses observed in this regard. Such compliance report will be placed ALTUM CREDO at regular intervals.

Reporting of the transactions to the designated agency

The Principal Officer shall report the cash transactions / suspicious transactions / counterfeit transactions to:

Director, FIU-IND,

Financial Intelligence Unit- India,

6th Floor, Hotel Samrat, Chanakyapuri,

New Delhi – 110021.

Reporting of transactions under KYC norms to FIU-IND

The report on the following transactions would be made by the 15th of the succeeding month:

   all cash transactions of the value of more than rupees Ten lakh or its equivalent in foreign currency;

   all series of cash transactions integrally connected to each other which have been valued below rupees Ten lakh or transactions have taken place within a month and the aggregate value of such transactions exceeds rupees Ten lakh;

   all transactions involving receipts by non-profit organizations of rupees Ten Lakhs or its equivalent in foreign currency.

   all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine and where place facilitating the transactions;

   all cross-border wire transfers of the value of more than Five Lakh rupees or its equivalent in foreign currency whether either original or destination of fund is in India.

The Report on the following transactions would be made within 7 working days of reaching conclusion, that the transaction is of suspicious nature:

   all transactions whether or not made in cash as specified in Rule 3(d) of Rule 3, of the Prevention of Money-Laundering (Maintenance of the Records) Rules, 2005)

The report on the following transaction would be made by the 15th day of the month succeeding quarter:

   All purchase and sale by any person of immovable property valued at Fifty lakh rupees or more that is registered by the ALTUM CREDO

Principal Officer on behalf of ALTUM CREDO will provide all the necessary help, to the authorities, such as NHB, Director FIU-IND for any further inquiries and clarifications or for any other purpose for which specific requisitions are made.

Responsibilities assigned to the personnel

With a view to implement the KYC policies and procedures effectively and also to fix accountability for lapses and intentional circumvention of the prescribed procedures and guidelines the responsibilities are delegated across the organization.

Education, Training and Information:

ALTUM CREDO has issued pamphlets / literature on the KYC norms to educate the customers on the need to collect such information the KYC norms, the procedures involved and the details to be collected from different category of customers to be used for educating the customers on the KYC norms. The literatures/pamphlets are updated to incorporate the changes in the KYC guidelines from time to time.

To sensitize staff towards the importance of KYC & AML procedure, ALTUM CREDO has designed its training programme for new recruiters and existing staff in its training programme. ALTUM CREDO maintains records of personnel deputed for such training internally or externally if need be. In addition, ALTUM CREDO shall also endeavor to nominate few staff members for external training programme also.

Procedures Manual

ALTUM CREDO has formulated procedure manuals for compliance of this policy.

Review of policy

ALTUM CREDO’s Board will review the policy adopted for KYC and AML as and when required and recommend incorporation of suitable modifications/changes. Modifications in the policies as a result of the change in the NHB guidelines will be incorporated as required under the statute. All such changes /modifications will be reported to the Board

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