Know Your Customer (KYC) Policy

1. Preamble:

Reserve Bank of India has been issuing guidelines in regard to Know Your Customer (KYC) standards to be followed by NBFC and measures to be taken in regard to Anti Money Laundering (AML)/ Combating Financing of Terrorism (CFT) and guidelines issued by Financial Action Tasks Force (FATF). This KYC policy document has been prepared in line with the RBI guidelines.Aryakube Capital Private Limited (hereinafter referred to as “ACPL” or “the Company”) is registered with the RBI as a Non-Banking Financial Company and is classified as a Base Layer NBFC (“NBFC-BL”) under the Scale Based Regulatory Framework issued by RBI.

2. Objectives, Scope and Application of the Policy:

The primary objective is to prevent the Company from being used, intentionally or unintentionally, by criminal elements for money laundering activities or terrorist financing activities.

• To lay down explicit criteria for acceptance of customers
• To establish procedures to verify the beneficial owner (BO) /non individuals for opening of account.
• To develop customer acceptance and identification process through obtaining and verification of officially valid documents
• To develop risk based approach for customer categorization
• To develop measures for conducting due diligence in respect of customers and reporting of such transactions.
• In case of any scenarios not explicitly covered under ACPL’s policy, the provisions as mentioned under the RBI guidelines shall be assumed.

3. Definition of Customer or Legal Entity (LE)

For the purpose of ACPL KYC policy a ‘Customer’ means a person defined under KYC policy of RBI and any amendment from time to time by RBI which are at present as under:-

• A person or entity that maintains an account and/or has a business relationship with ACPL;
• One on whose behalf the account is maintained (i.e. the natural beneficial owner)
• Beneficiaries of transactions conducted by professional intermediaries such as Stock Brokers, Chartered Accountants, Solicitors etc. as permitted under the law, and
• Any other person or entity connected with a financial transaction which can pose significant reputation or other risks to ACPL

4. Customer Acceptance Policy (“CAP”)

Customer Acceptance Policy requires all customers to fill in ACPL- KYC Form as attached to capture the relevant data for all categories of customers and provide supporting documents as given in the forms as a part of customer identification process / KYC. ACPL shall also ensure that:

• No account is opened in anonymous or fictitious/ benami name
• Account is opened after proper Customer Due Diligence (CDD) i.e. identifying and verifying the customer and the beneficial owner at the time of Unique Customer Identification Code (UCIC) level.
• profileCDD procedures shall be applied at the UCIC level. If an existing KYC-compliant customer opens or avails a new loan, no fresh CDD exercise shall be required unless there are changes in customer details or risk profile.Identity of the Customer should not match with any person or entity, whose name appears in the sanctions list indicated in the RBI circular
• Where Permanent Account Number (PAN) is obtained, the same shall be verified from the verification facility of the issuing authority and with the original document produced for verification.
• Where Goods and Services Tax (GST) details are available, the GST number shall be verified from the search/verification facility of the issuing authority.

In case ACPL 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

5. Customer Identification Procedures (“CIP”)

Customer identification means identifying the customer and verifying his/her identity by using reliable, independent source documents, data or information which may include customer due diligence done by a third party or from the Central KYC Records Registry. ACPL may obtain the KYC identifier from Customer to download records from CKYCR.

ACPL shall obtain sufficient information necessary to verify the identity of each new customer along with brief details of its promoters and management and the purpose of the intended nature of Business relationship. The requirement as mentioned herein may be moderated according to the risk perception like in the case of a public listed company it will not be necessary to identify all the shareholders.

Due to the nature of business of ACPL with single location, Video based Customer Identification Process (V-CIP) has not been stipulated.

6. Compliance of KYC – Documents Required

Before execution of facility agreement, ACPL shall ensure the compliance of KYC for new account of borrower/ Beneficial Owner or any person identified as authorized signatory of borrower.

ACPL has prescribed forms for different types of customers as per details given below:

1. Individual for Authorized Signatory and Beneficial Owner – ACPL -KYC-A
2. Non – Individual (for Borrower Company and Promoter Company) – ACPL -KYC-B

ACPL has prescribed the following documents to be provided for different types of customers as per details given below.As required under the Act and rules, information so collected shall be properly retained and preserved for each customer. Profile of customer may be prepared for quick reference as and when required. The information/documents so collected shall be treated as confidential and shall not be divulged for cross selling or for any other purpose.

1. 1. In case of Individual (for Authorized Signatory and Beneficial Owner)

*compulsory in case of non-resident Authorised Signatory of a Company.

** Shall be verified from the verification facility of the issuing authority through equivalent e-document thereof containing the details of his identity and address or OTP based validation; AND with the original document produced for verification and should be recorded by KYC officer of ACPL . Also, the Borrower shall be required to redact the Aadhaar number in case Aadhaar number can be electronically verified by ACPL.

The above documents are in any other language, and then it must be translated into English along with a certificate from translator / notary public.

2. In case of Non Individual (for Borrower Company/ Legal Entity)

Mandatory Documents required for starting a Relationship (to be obtained before execution of loan agreement) (To be signed by Authorized Signatory or Company secretory.)

• Private and Public Limited Companies
  • Certificate of incorporation, commencement of Business (if applicable)
  • Memorandum & Articles of Association
  • Permanent Account Number of the company
  • Resolution of the Board of Directors/Authority letter by CMD/MD/CEO/WTD/Director for Authorized person/s.
  • Registered office and the principal place of its business, if it is different
  • Names of persons holding senior management positions
  • KYC documents of Authorized signatory for Address and ID proof as mentioned for Individuals above
  • KYC documents of key Beneficial Owner (s) for Address and ID proof as mentioned for Individuals above

• Accounts, where third party mandate exists
  • A resolution from the Board of Directors and true notarized copy (with attested signature of POA holder and Managing Director or his authorized signatory) of power of Attorney (POA) Agreement.
  • Reason for granting POA
  • True Copy (certified by Company Secretary or director) of Identity and address documents of POA holder
  • All other verification documents as applicable for Public/Private limited companies.

Note :

1. 1. Certified – MCA master data / GST Registration certificate
   2. KYC of company and any shareholder or beneficial owner of such company listed on stock exchange is not required
   3. KYC of scheduled commercial banks and FIs are registered with statutory bodies like RBI, Government
      Companies or any organization owned or controlled by Government is exempted.
   4. KYC of Private Equity Fund/ trust, which are ultimate Beneficial Owner of the Borrower Company, is not required.
   5. “Senior Management” shall have the same meaning as defined in the Explanation to Section 178 of the
      Companies Act, 2013, i.e., personnel of the company who are members of its core management team (excluding the Board of Directors), comprising all members of management one level below the Executive Directors, including functional heads.

7. Uploading of KYC data on Central KYC Records Registry (CKYCR)

ACPL shall capture customer’s KYC records and upload onto CKYCR within 10 days of commencement of an account-based relationship with the customer which shall be updated if any updated KYC information is obtained or received from the Borrower. Once KYC identifier is generated , the same shall be communicated to the Borrower once it is uploaded.

whenever ACPL obtains additional or updated information from a customer under Rule 9(1C) of the PML Rules, such
updated information shall be furnished to CKYCR within seven days (or within such period as notified by the Central
Government). CKYCR will electronically notify all reporting entities that have previously dealt with the customer regarding the KYC update. Upon receiving such a notification, ACPL shall retrieve the updated KYC record from CKYCR and update its internal records accordingly.Verification of KYC documents through CKYC Records

For establishing an account-based relationship, KYC updation, periodic KYC reviews, or customer identity verification, ACPL shall:

a) Seek the KYC Identifier from the customer or retrieve it from CKYCR.
b) Obtain KYC records online using the KYC Identifier without requiring the customer to resubmit the same KYC records
or provide additional documents, unless:
(i) there is a change in the information of the customer as existing in the records of CKYCR;
(ii) the KYC record or information retrieved is incomplete or is not as per the current applicable KYC norms. ;
(iii) the validity period of documents downloaded from CKYCR has lapsed.
(iv) .ACPL deems it necessary to verify the identity or address (including current address), perform enhanced due
diligence, or build an appropriate risk profile of the customer.

8. PEP Policy of ACPL

Politically Exposed Persons (PEPs) shall include all individuals and their close relatives (i.e. parents, spouses,
children and their spouses defined as per Companies Act, 2013) who are or have been:

• Entrusted with prominent public functions by a foreign country, including the Heads of States/Governments, senior politicians, senior government or judicial or military officers, senior executives of state-owned corporations
• Important political party officials as below:
  
  • All existing and past Members of Legislative Assemblies/Members of Parliament
  • List of candidates who have contested elections in the past five years.
  • List of known politically connected movie stars, industrialists
  • List of all members of recognized political parties.

ACPL shall verify the beneficiary owner or promoter of Borrower company is PEP based on data available in public domain to the extent possible. In this regard, ACPL shall obtain the declaration about PEP at the time of KYC compliance and compliance of KYC shall be approved by MD

In case of establishing a relationship with PEPs or in case PEP is the beneficial owner, following should be ensured:

1. sufficient information including information about the sources of funds accounts of family members and close
   relatives is gathered on the PEP;
2. the identity of the person shall have been verified before accepting the PEP as a customer;
3. the decision to open an account for a PEP is approved by MD in accordance with the REs’ Customer Acceptance Policy;
4. all such accounts are 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, MD &CEO approval is obtained to continue the business relationship;
6. the CDD measures as applicable to PEPs including enhanced monitoring on an on-going basis are applicable

9. Risk Management:

The outcome of Risk assessment of type and identity of customer by ACPL shall be documented in the KYC Forms. The assessment process should consider all the relevant risk factors before determining the level of overall risk. While such risk assessment, ACPL shall take cognizance of the overall sector specific vulnerabilities, if that regulator may share with ACPL from to time. Risk factors such as customer identity, nature of customer, country of origin, sources of funds, type of transactions involved and other shall determine the extent of monitoring.

ACPL customers will be categorized based on perceived risk, into three categories – A, B & C. None of the entities will be exempted from ACPL’s KYC procedure, irrespective of the status and relationship with Company or promoter The above requirement may be moderated according to the risk perception.

The risk category of the customers shall be categorized into three levels:

• Level A – High Risk
• Level B – Medium Risk
• Level C – Low Risk

The following customers shall be categorized as Level C (Low Risk) risk customer

✔  Relationships with regulated Financial Institutions in, or having their Head Office in, equivalent
jurisdictions or countries that adopted equivalent standards (where reliance is placed on the fact that the
Head Office is in an FATF or equivalent country, its policies and procedures must be binding on the country
branch or subsidiary concerned).
✔  Relationships with Government departments (Ministerial or Non-ministerial) or their agencies, (including
their statutory corporations and their private companies), except those in/from high risk countries (i.e.
FATF non-compliant country)
✔  Relationships with listed companies and their subsidiaries.
The following customers shall be categorized as Level B (Medium Risk) risk customer
✔  All relationships not categorized as Level C and Level A
The following customers shall be categorized as Level A(High Risk) risk customer based on the limited due
diligence carried out at the time of sanction and as part of legal due diligence by ACPL before execution of loan
agreement and based on the declaration submitted by company as part of KYC documents.
✔  Government departments or their agencies, statutory corporations and private companies in/from high risk
countries ( i.e. FATF non-compliant country)
✔  Relationships involving offshore trust structure. relationships involving bearer shares.
✔  Relationships, whose businesses are vulnerable to Money Laundering (ML) risks such as Gambling,
defense and money service bureau and dealers in high value commodities (eg: traders in precious metals,
jewelers and antique dealers).
✔  Name of company or its Beneficial Owner does not appears in the Sanction list by UN Council (UNSCR
1718 Sanctions List of designated Individuals and Entities), or ISIL & Al-Qaida Sanctions list or Taliban
Sanctions list maintained pursuant to Security Council resolutions,
(ref: https://www.mea.gov.in/Implementation-of-UNSC-Sanctions-DPRK.htm;
https://scsanctions.un.org/ohz5jen-al-qaida.html; https://scsanctions.un.org/ohz5jen-al-qaida.html
✔  Name of company or its Beneficial Owner does not appears in the designated list for obligation under
Weapons for Mass destruction (VMD) and their delivery system
✔  Falls under sector specific vulnerabilities as informed by the regulator

ACPL shall carry out the Money Laundering and Terrorist Financing Assessment annually to identify, assess and take effective measures to mitigate its money laundering and terrorist financing risk for clients, countries or
geographic area, products etc. This should be done by ensuring the name of customers does not appear in the Sanctions list of UN (UNSCR 1718 Sanctions List of designated Individuals and Entities) or ISIL & Al-Qaida Sanctions list or Taliban Sanctions list maintained pursuant to Security Council resolutions.

Principal officer may submit the periodic report to the Board of Directors if there is a need arises in case of High Risk cases where ever and which may require further guidance from the Board so they can assess the risk involved in the case of different customers on the basis of data collected by project department. Depending on the requirement, services an independent consultant having knowledge and background on the subject may be taken. Such issues categorization shall be kept confidential and shall not be divulged to any third party irrespective of their relationship with Company at any level of organization

10. Periodic Updation of KYC documents

The periodicity of updation of KYC shall be once in ten (10) years in case of low risk category customers and once in eight (8) years in case of medium risk categories and two (2) years in case of high risk categories.

ACPL shall periodically update customer identification data after the transaction is completed and review annually for the active loan accounts except NPA. The scope of review shall essentially means profile of customer, status of accounts, change in Beneficial Owner/ key shareholder. ACPL shall obtained the confirmation / self- declaration from Borrower via digital channels or a letter from an authorized official of the Borrower entity on yearly basis for any change in KYC. If there’s a change in KYC information, ACPL shall undertake the KYC process equivalent to onboarding as new Borrower within 30 days of such changes intimated by the Borrower.

In case of no change in the KYC information, a self-declaration in this regard shall be obtained (in the format provided by ACPL as attached) from the Borrower through its email id registered with ACPL/ letter from an official authorized by the Borrower / board resolution, etc

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, records pertaining to KYC shall be maintained by ACPL for period of Five (5) years from the date of cessation of transactions with the Borrower.

11. Monitoring and reporting of Transactions:

Monitoring of transactions will be conducting taking into consideration the risk profile of the account. Higher risk accounts shall be subject to intensify monitoring. ACPL shall carry out the periodic review of risk categorization of transactions/customers and the need for applying enhanced due diligence measures at a periodicity of not less than once in twelve months. The ongoing due diligence shall means regular monitoring of transactions in accounts to ensure that they are consistent with customer profile and source of fund. For all accounts, Higher risk accounts shall be subject to intensify monitoring.

Further, ACPL shall verify before opening the account and review within 12 months, the UNSCR 1718 Sanctions
List of Designated individuals and Entities as available at https://www.mea.gov.in/Implementation-of-UNSCSanctions-DPRK.htm  to take into account of any modifications to the list in terms of addition, deletion, or other changes and also ensure the compliance with implementation of Security Council Resolution on Democratic People’s. Republic of Korea Order, 2017 as amended from time to time by the Central Government. In addition, ACPL shall take into account compliance with implementation of Section 51A of the Unlawful Activities
(Prevention) Act, (UAPA) 1967 and Section 12 A of the WMD Act.

ACPL shall validate watch lists available in public domain, including RBI watch list and any transactions or suspicious nature will be duly reported by principal officer to Director, Financial Intelligence Unit- India (FIU_IND)

12. Designated Director/ Principal Officers for KYC/ AML/ CFT:

Designated Director, who shall be the MD, shall ensure overall compliance with the obligations imposed under PML Act and the Rules and shall be nominated by the Board. Principal Officer(s) for KYC will act independently and report directly to the concerned Director/MD or to the Board of Directors. The role and responsibilities of the Principal Officer(s) should include overseeing and ensuring overall compliance with regulatory guidelines on KYC/AML/CFT issued from time to time and obligations under the Prevention of Money Laundering Act, 2002 and the Prevention of Money Laundering Rules 2005, rules and regulations made there under, as amended form time to time. Names of Designated Director and Principal Officer(s) shall be informed to FIU and RBI.

The required data from borrower shall be collected as prescribed in this policy, irrespective whether ACPL is the lead institution or there are other co-financing institutions. To ensure monitoring of ACPL’s KYC Guidelines, the borrowers may be requested to resubmit their KYC periodically as defined elsewhere based on Risk Category or in case there is any change in the structure of entity with new promoter which does not have any relationship with ACPL within 30 days of information of such change.

Information collected from the Customer shall be treated as confidential and details thereof are not to be divulged for cross selling or any other like purposes. ACPL shall therefore, ensure that information sought from the Customer is relevant to the perceived risk, is not intrusive and is in conformity with the guidelines issued by RBI in this regard. ACPL shall ensure that any remittance of funds by way of demand draft, mail/telegraphic transfer or any other mode for any amount is affected by cheques and not against cash payment.

13. Closure of Accounts/Termination of Financing/Business Relationship:

Where ACPL is unable to apply appropriate KYC measures due to non furnishing of information and/or nonoperation by the customer, ACPL shall terminate Financing/Business Relationship after issuing due notice to the customer explaining the reasons for taking such a decision. Such decision shall be taken with the approval of MD. Customer Education & Awareness

The above policy will be displayed in Office Premises to educate the customer of the objectives of the KYC / AML/ CFT programme. While dealing with customers, Staff in ACPL shall take special care in obtaining required information from the client.

14. Employee’s Training

ACPL shall have an ongoing employee training programme so that the Team members are adequately trained in KYC/ AML/ CFT procedures. It is crucial that all those concerned fully understand the rationale behind the KYC policies and implement them.

15. Updation in KYC Policy of Company

ACPL Board will be authorized to amend/modify the KYC Policy or such other related guidance notes of Company, to be in line with RBI or such other statutory authority’s requirements/updates/ amendments time to time.

Know-Your-Customer (KYC) Form A

(For Individuals- Authorized Signatory / Beneficial Owner only) Individual Information

A. Full Legal Name ’           Mr./Ms./Mrs

B. Full Address:

C. Date of Birth

D. PAN No.

E. Passport No. (only in case of non resident individuals)

F. CKYC Identifier no (if any)

G. Educational Background

I/We hereby authorise Aryakube Capital Private Limited for the purposes of their review to access my/our records from CKYCR, PAN and UIDAI databases from time to time as may be required by them

Signature…………………….……………………………

Name…………………….………………………………..

Date……………………

Place…………………..

Know-Your-Customer (KYC) Form B

(Only for Non Individual Customers)

(to be fill by Customer and its Promoter (ifcorporateentity))

Customer Information

1. Full Legal Name ‘Customer’
2. Full Registered Address

Telephone No…

Email Id…..

3. Full Principal Operating Address (if different from above)
4. Group Name (if any)
5. Name of CEO/MD/CMD
6. Name of key Beneficial Owner
7. Nature of Business Activity
8. Registration Number (CIN No)
9. Date of Incorporation
10. Legal Constitution Public Ltd/Pvt Ltd Company/JV/Partnership/LLP
11. PAN No. of Company
12. GSTN Number
13. LEI Number
14. CKYC Identifier No (if any)
    
15. Contact Person’s Name 

Mr./Ms.……………………………………………………………

Telephone No. ……………………………………………………

Mobile No. ………………………………………………………..

EmailID……………………………………………………………

P. Details of Senior Management of company (may attach the detail separately as annexure)

Q. Details of All Authorized Signatories (Separate Form A- mandatory)

I/We hereby confirm that I/We have read and understood the requirement of KYC of ACPL for compliance of Know Your Customer (KYC). I/We hereby declare that the particulars given herein are true, correct and complete to the best of my/our knowledge and belief, the documents submitted along with this application are genuine and I/we am/are not making this application for the purpose of contravention of any Act, Rules, Regulations or any statute or legislation or any Notifications, Directions issued by any governmental or statutory authority from time to time. I/we hereby undertake to promptly inform ACPL of any changes to the information provided hereinabove and agree and accept that ACPL & any of their authorized representatives (‘the Authorized Parties’) are not liable or responsible for any losses, costs, damages arising out of any actions undertaken or activities performed by them on the basis of the information provided by me/us as also due to my not intimating / delay in intimating such changes. I/we hereby authorize ACPL to disclose, all / any of the information provided by me/us to the respective regulator/statutory body as may be deemed fit by ACPL or the case may be. I/we hereby agree to provide any additional information / documentation that may be required by the Authorized Parties, in connection with this application. I/We hereby authorise Aryakube Capital Private Limited for the purposes of their review to access my/our records from CKYCR, PAN and UIDAI databases from time to time as may be required by them.

Signature of the Authorized Representative

…………………………………………………………………… 

Name of the company ……………………………………….. 

Date……………………

Place…………………..

——————————————————————————————————————————————————————————————————-–

List of Documents (duly signed, stamped by authorized signatory) Mandatory Document

1. Certificate of incorporation, commencement of Business (if applicable) and
2. Memorandum & Articles of Association
3. Copy of PAN
4. Resolution of the Board of Directors/Authority letter by CMD/MD/CEO/WTD/Director for Authorized person/s mentioned in this form.
5. Copy of Proof of Address (any of the following)
   • Utility bill which is not more than two months old of any service provider;
   • Form 18 and ROC receipt filed for recording change of registered address
   • Any other documents issued by Government showing Address
6. Form A of Authorized signatory alongwith Address and ID proof (Self attested)- applicable for the individuals signing the facility documents
7. Form A of key Promoter Director(s)alongwith Address and ID proof (Self attested or attested by Authorized Signatory)

.*ACPL has also right to ask any such other information/documents as may be required time to time or as per regulatory requirement.

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For Office Use only

Account Risk Classification             (tick yes or no)

Declaration for KYC (Know-Your-Customer)
(To be submitted annually on the letterhead of the company)

Date:

To

Aryakube Capital Private Limited
Address:-214, Cyber crown, Sec II, 2nd Floor
HUDA Techno Enclave, Madhapur
Hyderabad TG 500081 IN 

Sub: purpose of loan: Change in KYC Dear Sir/Madam

I      , as authorised signatory on behalf of the company                                                                                              confirm that there is change /no change in the KYC information provided by the company for the financial assistance availed from your esteemed organisation.

Information regarding KYC updation

I hereby declare that the information provided above is true and correct to the best of my knowledge.

Thanking You
Yours faithfully

Signature of Authorised signatory with the rubber stamp of the company.

Format of the monitoring Loan Account under KYP Policy (To be reviewed half yearly)

Name of loan account
Date of review :

The due diligence shall be done based on the review of applicable list available in public domain for validating the name of customer

Format of the monitoring Loan Account under KYP Policy (To be reviewed half yearly)

Date of review:                                                   No of loan accounts review            (list attached)

The name of loan accounts where risk classification has been changed, is attached – Yes / No

The due diligence shall be done based on the review of applicable list available in public domain for validating the name of customer.

KYC Master Data

Detail of active loan accounts (other than NPA accounts), where review is completed