General

As per RBI/DBR/2015-16/18 Master Direction DBR.AML.BC. No.81/14.01.001/2015-16, every NBFC should have KYC policy with the following four key elements: -

• Customer Acceptance Policy
• Risk Management
• Customer Identification Procedures (CIP)
• Monitoring of transactions

Money Laundering and Terrorist Financing Risk Assessment

Newtap Finance Private Limited Ltd 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, Newtap Finance Private Limited Ltd shall take cognizance of the overall sector-specific vulnerabilities, if any, that the regulator/supervisor may share with NBFCs from time to time.

The risk assessment by Newtap Finance Private Limited Ltd shall be properly documented. Further, the periodicity of risk assessment exercise shall be determined by the Board of Newtap Finance Private Limited Ltd, in alignment with the outcome of the risk assessment exercise.

The outcome of the exercise shall be put up to the Board or any committee of the Board to which power in this regard has been delegated, and should be available to competent authorities and self-regulating bodies.

Newtap Finance Private Limited Ltd shall apply a Risk Based Approach (RBA) for mitigation and management of the identified risk and should have Board approved policies, controls and procedures in this regard. Further, Newtap Finance Private Limited Ltd shall monitor the implementation of the controls and enhance them if necessary

Designated Director

A “Designated Director” means a person designated by the NBFC to ensure overall compliance with the obligations imposed under Chapter IV of the PML Act and the Rules and shall be nominated by the Board

The name, designation and address of the Designated Director shall be communicated to the FIU-IND

In no case, the Principal Officer shall be nominated as the 'Designated Director'

He/She must be the Managing Director or a whole-time Director, duly authorized by the Board of Directors

Principal Officer

Appoint a senior management officer to be designated as Principal Officer. Principal Officer shall be located at the head/corporate office of the bank and shall be responsible for monitoring and reporting of all transactions and sharing of information as required under the law

The Principal Officer shall be responsible for ensuring compliance, monitoring transactions, and sharing and reporting information as required under the law/regulations

It is advised that the Principal Officer and other appropriate staff should have timely access to customer identification data and other CDD information, transaction records and other relevant information

Further, NBFCs should ensure that the Principal Officer is able to act independently and report directly to the senior management or to the Board of

The name, designation and address of the Principal Officer shall be communicated to the FIU- IND

Responsibilities of Principal officer:
The Principal Officer will be responsible for timely submission of CTR and STR to FIU-IND
A summary of cash transaction reports for the NBFC as a whole may be compiled by the Principal Officer of the NBFC in physical form as per the format specified. The summary should be signed by the Principal Officer and submitted both for manual and electronic

Compliance of KYC Policy

Newtap Finance Private Limited LTD shall ensure compliance with KYC Policy through:

a. Specifying as to who constitute ‘Senior Management’ for the purpose of KYC compliance
b. Allocation of responsibility for effective implementation of policies and procedures
c. Independent evaluation of the compliance functions of Newtap Finance Private Limited policies and procedures, including legal and regulatory requirements
d. Concurrent/internal audit system to verify the compliance with KYC/AML policies and procedures
e. Submission of quarterly audit notes and compliance to the Audit Committee
f. Newtap Finance Private Limited Ltd shall ensure that decision-making functions of determining compliance with KYC norms are not outsourced

Customer Acceptance Policy

• No account is to be opened in anonymous or fictitious/benami name(s)/entity(ies)
• No account is opened where Newtap Finance Private Limited Ltd 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
• No transaction or account-based relationship is undertaken without following the CDD procedure
• The mandatory information to be sought for KYC purpose while opening an account and during the periodic updating, is specified
• Optional/additional information is obtained with the explicit consent of the customer after the account is opened
• Newtap Finance Private Limited Ltd shall apply the CDD procedure at the UCIC (Unique Customer Identification Code) level. Thus, if an existing KYC compliant customer desires to open another account, there shall be no need for a fresh CDD exercise
• 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 or as prescribed by Reserve Bank of India
• Where Permanent Account Number (PAN) is obtained, the same shall be verified from the verification facility of the issuing authority
• Circumstances in which, a customer is permitted to act on behalf of another person/entity, is clearly spelt out in conformity with the established law and practice of banking as there shall be occasions when an account is operated by a mandate holder or where an account shall be opened by an intermediary in the fiduciary capacity
• Customer Acceptance Policy shall not result in denial of banking/financial facility to members of the public, especially those, who are financially or socially disadvantaged.

Risk Management

For Risk Management, Newtap Finance Private Limited Ltd shall have a risk-based approach which includes the following: -

1. The Company shall prepare a profile for each new customer based on risk categorization. The customer profile may contain information relating to the customer’s identity, financial status, credit reports, employment status etc. The nature and extent of due diligence shall depend on the risk perceived by the Company. However, while preparing a customer profile the Company shall take care to seek only such information from the customer which is relevant to the risk category and is not intrusive. The customer profile shall be a confidential document and details contained therein shall not be divulged for cross selling or any other purposes unless consented by the customer
2. Based on historical bureau data of users, employment status & other financial parameters, customers are classified into different risk categories. Loans are offered at different interest rates based on the risk profile of the
3. For customers falling under high-risk category, additional functionalities like limit enhancement will be put on hold until the customers moves to lower risk category

The Board of directors of the Company shall ensure that an effective KYC program is put in place by establishing appropriate procedures and ensuring their effective implementation. It shall cover proper management oversight, systems and controls, segregation of duties, training and other related matters. Responsibility would be explicitly allocated within the Company for ensuring that the Company’s policies and procedures are implemented effectively. The Company shall, in consultation with the Board, devise procedures for creating risk profiles of their existing and new customers and apply various Anti Money Laundering measures keeping in view the risks involved in a transaction, account or business relationship.

The Company has an ongoing employee training program so that staff are adequately trained in KYC procedures.

Anti Money Laundering and Combating financing of terrorism

In terms of PMLA Rules, suspicious transactions shall include inter alia transactions which give rise to a reasonable ground of suspicion that these may involve financing of activities related to money laundering or terrorism. The Company, therefore, shall develop suitable mechanism through appropriate policy framework for enhanced monitoring of accounts suspected of having money laundering or terrorist links and swift identification of transactions and making suitable reports to the Financial Intelligence Unit – India (FIU-IND) on priority.

As and when the list of individuals and entities, approved by Security Council Committee established pursuant to various United Nation’s Security Council Resolutions (UNSCRs), is circulated by RBI, the Company shall ensure to update the consolidated list of individuals and entities as circulated by RBI. The Company shall, before opening new accounts, ensure that names of proposed customers do not appear in the list. Further, the Company shall scan all existing accounts to ensure that no account is held by or linked to any of the entities or individuals included in the list. Full details of accounts bearing resemblance with any of the individuals / entities in the list shall immediately be intimated to RBI and FIU-IND. KYC norms / AML standards / CFT measures have been prescribed to ensure that criminals are not allowed to misuse the financial channels. Adequate screening mechanism shall be put in place by the company as an integral part of recruitment/hiring process of personnel.

Cash and suspicious transaction reports

• Cash Transaction Report (CTR)
  All individual cash transactions in an account during a calendar month, where either debits or credit summation, computed separately, exceeding Rupees Ten Lakhs or its equivalent in foreign currency, during the month should be reported to FIU-IND. However, while filing CTR, details of individual cash transactions below Rupees Fifty Thousand may not be indicated.
  
  The Principal Officer should ensure submission of CTR for every month to FIU-IND before 15th of the succeeding month. CTR should contain only the transactions carried out by the Company on behalf of their clients/customers excluding transactions between the internal accounts of the Company.
   
• Suspicious Transaction Reports (STR)
  The Suspicious Transaction Reports (STR) should be furnished within 7 days of arriving at a conclusion that any transaction, whether cash or non-cash, or a series of transactions integrally connected are of suspicious nature. The Principal Officer of the Newtap Finance Private Limited Ltd shall record his / her reasons for treating any transactions or a series of transactions as suspicious. It should be ensured that there is no undue delay in arriving at such a conclusion once a suspicious transaction report is received from the Company or any other branch office. Such a report will be made available to the competent authorities on request.
  
  The Principal Officer should record his reasons for treating any transaction or a series of transactions as suspicious. It should be ensured that there is no undue delay in arriving at such a conclusion once a suspicious transaction report is received
  
  Further the Company shall not put any restrictions on operations in the accounts where an STR has been made. The Company and its employees shall keep the facts of furnishing of STR strictly confidential, as required under PML rules. It should be ensured that there is no tipping off to the customer at any level.

Customer Identification Procedure (CIP)

Newtap Finance Private Limited Ltd shall undertake identification of customers in the following cases:

1. Commencement of an account-based relationship with the customer
2. Carrying out any international money transfer operations for a person who is not an account holder of the Company
3. When there is a doubt about the authenticity or adequacy of the customer identification data
4. Selling third party products as agents, selling their own products, payment of dues of credit cards/sale and reloading of prepaid/travel cards and any other product for more than rupees fifty thousand
5. Carrying out transactions for a non-account-based customer, that is a walk-in customer, where the amount involved is equal to or exceeds rupees fifty thousand, whether conducted as a single transaction or several transactions that appear to be connected
6. When Newtap Finance Private Limited Ltd has reason to believe that a customer (account- based or walk-in) is intentionally structuring a transaction into a series of transactions below the threshold of rupees fifty thousand

CKYC:

Newtap Finance Private Limited Ltd shall primarily perform Central KYC, an initiative to have structure in place which allows investors to complete their KYC only once before interacting with various entities across the financial sector. CKYC is applicable only to Individuals (both Resident Individuals and Non- Resident Individuals (NRIs).

Newtap Finance Pvt Ltd shall register Financial institutions on CKYC Registry portal. After providing the required details and approvals by the authorities, system will generate a unique FI Code and will create two admin logins for the FI after successful registration.

Newtap Finance Private Limited Ltd shall formulate standard operating procedure for CKYC and ensure adherence to it.

1. FI Registration input option shall include all the required details of Newtap Finance Private Limited Ltd and the details of two admins that are to be created along with the institution registration
2. Upon submission of the details the system will generate a temporary reference number and mail will be sent to compliance officer informing the same
3. FI shall send the signed form along with the supporting documents to CERSAI
4. CKYC Registry Admin will verify the entered details with physical form received. Correct details would mean the Admin will authorize and approve the registration application
5. In case of discrepancies, Admin will put the request on hold and the system will send email to the institution compliance officer (email ID provided in FI registration form). To update the case hyperlink would be provided in the email.
6. Upon Registry approval, user credentials will be sent to the email IDs of admin1, admin2 separately and compliance officers will get the welcome email along with FI code
7. After activation of users by a Financial institution an email will be sent to the user containing User ID and a link to generate password.
8. User Id is auto populated. User needs to enter a 10 digit mobile number as provided during FI Registration which shall be validated with OTP along with confirming the new
9. Post Logging in User needs to select the digital signature that was registered during the first time user login. Digital certificate selected is validated each time against the one registered during first login/last modified. User is navigated to the CKYC application home screen after the certificate is successfully Users can perform different operations as per assigned role.

oKYC (Aadhaar Paperless Offline e-kyc)

Newtap Finance Private Limited Ltd shall partner with Technology Service Providers (TSPs) / agencies authorized by UIDAI to offer oKYC as an alternate method of customer identification to customers in cases where CKYC is not available or not satisfactory.

Newtap Finance Private Limited Ltd shall formulate a standard operating procedure and put in place appropriate due diligence measures for running the oKYC process and ensure adherence to it.

oKYC Procedure:

1. User enters 12 digit Aadhaar number or 16 digit VID number on a page hosted by UIDAI to retrieve Aadhaar XML
2. User enters the CAPTCHA / confirmation code in the follow up screen for security validation
3. User enters the 6 digit OTP received on the mobile number registered with UIDAI
4. The Agency partner reads, validates signature and date, and renders the Aadhaar information retrieved from the XML in a presentable format to the user for user confirmation
5. oKYC is marked as completed if the user confirms the details displayed
6. Newtap Finance Private Limited Ltd stores a copy of the Aadhaar XML retrieved for proof of KYC completion

Video KYC:

Newtap Finance Private Limited Ltd may perform Video KYC in cases where CKYC or oKYC are not available or not satisfactory.

Video based Customer Identification Process (V-CIP) is an alternate method of customer identification with facial recognition and customer due diligence by an authorised official of the Company by undertaking seamless, secure, live, informed-consent based audio-visual interaction with the customer to obtain identification information required for CDD purpose.

Newtap Finance Private Limited Ltd may undertake V-CIP to carry out:

• CDD in case of new customer on-boarding for customers
• Periodic updation of KYC for eligible customers if perceived mandatory by the management

CIP Procedure:

• Newtap Finance Private Limited Ltd shall formulate a clear work flow and standard operating procedure for V-CIP and ensure adherence to it. The V-CIP process shall be operated only by officials of Newtap Finance Private Limited Ltd specially trained for this purpose.
• The official shall be capable to carry out a liveliness check and detect any other fraudulent manipulation or suspicious conduct of the customer and act upon
• If there is a disruption in the V-CIP procedure, the same shall be aborted and a fresh session shall be initiated
• The sequence and/or type of questions, including those indicating the liveness of the interaction, during video interactions shall be varied in order to establish that the interactions are real-time and not pre-recorded.
• Any prompting, observed at the end of the customer shall lead to rejection of the account opening
• The authorised official of Newtap Finance Private Limited performing the V-CIP shall record audio-video as well as capture photograph of the customer present for identification and obtain the identification information using any one of the following:
  - OTP based Aadhaar e-KYC authentication
  - Offline Verification of Aadhaar for identification
  - KYC records downloaded from CKYCR, in accordance with Section 56, using the KYC identifier provided by the customer
  - Equivalent e-document of Officially Valid Documents (OVDs) including documents issued through DigiLocker

Data to be stored for V-CIP:

• The entire data and recordings of V-CIP shall be stored in a system / system located in Newtap shall ensure that the video recording is stored in a safe and secure manner and bears the date and time stamp that affords easy historical data search.
• The extant instructions on record management, as stipulated in the RBI Master Direction - Know Your Customer (KYC) Direction, 2016, shall also be applicable for V-CIP.
• The activity log along with the credentials of the official performing the V-CIP shall be
• Customer Due diligence by 3rd Party:
• To verify the identity of customers at the time of commencement of an account-based relationship, Newtap Finance Private Limited Ltd, shall at its option, may rely on customer due diligence done by a third party, subject to the following conditions:
• Records or the information of the customer due diligence carried out by the third party is obtained within two days from the third party or from the Central KYC Records Registry
• Adequate steps are taken by Newtap Finance Private Limited Ltd to satisfy themselves that copies of identification data and other relevant documentation relating to the customer due diligence requirements shall be made available from the third party upon request without delay
• The third party is regulated, supervised or monitored for, and has measures in place for, compliance with customer due diligence and record-keeping requirements in line with the requirements and obligations under the PML Act
• The third party shall not be based in a country or jurisdiction assessed as high risk
• The ultimate responsibility for customer due diligence and undertaking enhanced due diligence measures, as applicable, will be with Newtap Finance Private Limited Ltd. Enhanced Due diligence measures are indicated in Section 6, Customer Due Diligence Procedure

Customer Due Diligence Procedure (CDD)

Section 1: CDD Procedure

For undertaking CDD, Newtap Finance Private Limited Ltd shall obtain the following from an individual while establishing an account-based relationship or while dealing with the individual who is a beneficial owner, authorized signatory or the power of attorney holder related to any legal entity:

• A certified copy of any OVD containing details of his identity and address
• The Permanent Account Number or Form 60 as defined in Income-tax Rules, 1962, and 
• Such other documents pertaining to the nature of business or financial status as required by Newtap Finance Private Limited Ltd

Newtap Finance Private Limited Ltd may carry out online verification of a customer.

In cases where successful authentication has been carried out, other OVD and photographs need not be submitted by the customer.

The Company intends to collate the KYC information from different types of customers in line with the Master Direction - Know Your Customer (KYC) Directions, 2016. The list of KYC details will be collected from different types of customers listed in Annexure I.

Explanation 1: Newtap Finance Private Limited LTD 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.

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, the Aadhaar and Other Law (Amendment) Ordinance, 2019 and the regulations made thereunder.

Periodic Updation

Newtap Finance Private Limited Ltd shall adopt a risk-based approach for periodic updation of KYC. However, periodic updation shall be carried out 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. Policy in this regard shall be documented as part of Newtap Finance Private Limited Ltd’s internal KYC policy duly approved by the Board of Directors

Individual Customers

1. 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 or customer’s mobile number registered with Newtap Finance Private Limited Ltd
2. 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 Newtap Finance Private Limited Ltd, customer’s mobile number registered with Newtap Finance Private Limited Ltd, digital channels (such as online banking, mobile application of Newtap Finance Private Limited Ltd), 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, Newtap Finance Private Limited Ltd to obtain a copy of OVD or deemed OVD or the equivalent e-documents thereof for the purpose of proof of address, declared by the customer at the time of periodic updation.

Client accounts opened by professional intermediaries:

Newtap Finance Private Limited Ltd shall ensure while opening client accounts through professional intermediaries, that:

1. Newtap Finance Private Limited Ltd shall, at their discretion, rely on the 'customer due diligence' (CDD) done by an intermediary, provided that the intermediary is a regulated and supervised entity and has adequate systems in place to comply with the KYC requirements of the customers
2. Types of KYC allowed are cKYC and oKYC
3. Clients shall be identified when client account is opened by a professional intermediary on behalf of a single client
4. Newtap Finance Private Limited Ltd shall not open accounts of such professional intermediaries who are bound by any client confidentiality that prohibits disclosure of the client details to Newtap Finance Private Limited Ltd
5. All the beneficial owners shall be identified where funds held by the intermediaries are not co- mingled at the level of Newtap Finance Private Limited Ltd, and there are 'sub-accounts', each of them attributable to a beneficial owner, or where such funds are co-mingled at the level of Newtap Finance Private Limited Ltd, it shall look for the beneficial owners
6. The ultimate responsibility for knowing the customer lies with Newtap Finance Private Limited Ltd

Monitoring of Transactions

As per Income Tax Act, 1961, Cash cannot be accepted by any person (Branch / collection staff) over and above Rs. 2,00,000/- (Two Lakhs only) for a particular transaction or series of integrally connected transactions. The Company does not accept cash deposits in foreign currency.

As per Income Tax Act, 1961, for any Cash or its equivalent payment over and above Rs. 10,000/-, a ‘source of funds’ declaration for such cash should be obtained from the Customer / person depositing / repaying the loan.
Note: Source of funds in cash is through ‘sale of immovable property’, then Cash or its equivalent for more than Rs. 20,000/- should not be accepted.

Ongoing monitoring is an essential element of effective KYC procedures. Newtap Finance Private Limited Ltd can effectively control and reduce the risk only if it understands the normal and reasonable activity of the customer so that it has the means of identifying transactions that fall outside the regular pattern of activity. However, the extent of monitoring shall depend on the risk sensitivity attached with the client. The Company shall pay special attention to all complex, unusually large transactions and all unusual patterns which have no apparent economic or visible lawful purpose.

The Company shall prescribe threshold limits for a particular category of clients and pay particular attention to the transactions which exceed these limits. Transactions that involve large amounts of cash inconsistent with the normal and expected activity of the customer would particularly attract the attention of the company. Further, there are no operative accounts wherein the need for fixing the threshold limit for individual transactions and aggregate is more relevant and necessary. Transactions with the Company are purely restricted to the debt service payable over the tenor of the loan. While threshold limits of transactional basis are restricted to the debt service payable, the threshold for turnover shall be restricted to the aggregate debt service payable year after year.

Transactions that involve cash over and above Rs. 1 lac should particularly attract the attention of Newtap Finance Private Limited Ltd. Higher risk accounts shall be subjected to intense monitoring.

The Company shall put in place a system of periodic review of the risk categorization of accounts and the need for applying enhanced due diligence measures in case of higher risk perception on a customer. Review of risk categorization of customers shall be carried out at a periodicity of not less than once in six months. The Company shall also introduce a system of periodical updating of customer identification data (including photograph/s) after the account is opened. The periodicity of such updating shall not be less than once in five years in case of low risk category customers and not less than once in two years in case of high and medium risk categories.

Record Management

Government of India, Ministry of Finance, Department of Revenue, vide its notification dated July 1, 2005 in the Gazette of India, has notified the Rules under the Prevention of Money Laundering Act (PMLA), 2002. In terms of the said Rules, the provisions of PMLA, 2002 came into effect from July 1, 2005. Section 12 of the PMLA, 2002 casts certain obligations on the banking companies in regard to preservation and reporting of customer account information.

Maintenance of records of transactions

The Company shall maintain a proper record of transactions prescribed under Rule 3 of PML Rules, 2005, as mentioned below:

1. All cash transactions of value more than INR 10 Lakhs or its equivalent in foreign currency
2. All series of cash transactions integrally connected to each other which have been valued below INR 10 Lakhs or its equivalent in foreign currency where such series of transactions have taken place within a month and the aggregate value of such transactions exceeds INR 10 Lakhs
3. All transactions involving receipts by non-profit organizations of value more than INR 10 Lakhs or its equivalent in foreign currency
4. 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 transactions
5. All suspicious transactions whether or not made in cash and by way of as mentioned in the Rules Information to be preserved

The Company will maintain all necessary information in respect of transactions referred to in Rule 3 to permit reconstruction of individual transaction, including the following information:

1. The nature of transactions
2. The amount of transaction and the currency in which it was denominated
3. The date on which the transaction was conducted
4. The parties to the transaction
5. Maintenance and preservation of records

The Company will maintain records containing information of all transactions including the records of transactions detailed in Rule 3 above. The Company should also take appropriate steps to 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 authority.

Further, in terms of PML Amendment Act 2012 notified on February 15, 2013, the Company should maintain for at least five years from the date of transaction between the Company and the client, all necessary records of transactions, both domestic and or international, which will permit reconstruction of individual transactions (including the amount and type of currency involved if any) so as to provide, if necessary, evidence for prosecution of persons involved in criminal activity.

The Company should ensure that records pertaining to the identification of customer and his address (e.g. copies of documents like passports, identity cards, driving licenses, PAN cards, utility bills etc.) obtained while opening the account and during the course of business relationship, are properly preserved for at least five years after the business relationship is ended as required under Rule 10 of the PML Rules. The identification records and transaction data should be made available to the competent authorities upon request.

Reporting to Financial Intelligence Unit – India

In terms of PMLA Rules, the Company will report information relating to cash and suspicious transactions and all transactions involving receipts by non-profit organizations of value more than INR 10 lakhs or its equivalent in foreign currency to the Director, Financial Intelligence Unit – India (FIU-IND) in respect of transactions referred to in Rule 3 at the following address: -

Director, FIU-IND,
Financial Intelligence Unit – India, 6th Floor, Hotel Samrat, Chanakyapuri,
New Delhi – 110021
Website – http://fiuindia.gov.in/

Requirements/obligations under International Agreements

Newtap Finance Private Limited LTD shall ensure that in terms of Section 51A of the Unlawful Activities (Prevention) (UAPA) Act, 1967, they do not have any 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 details of the two lists are as under:

1. The “ISIL (Da’esh) &Al-Qaida Sanctions List”, which includes names of individuals and entities associated with the Al-Qaida. The updated ISIL &Al-Qaida Sanctions List is available at https://scsanctions.un.org/fop/fop?xml=htdocs/resources/xml/en/consolidated. xml&xslt=htdocs/resources/xsl/en/al-qaida-r.xsl
    
2. The “1988 Sanctions List”, consisting of individuals (Section A of the consolidated list) and entities (Section B) associated with the Taliban which is available at https://scsanctions.un.org/fop/fop?xml=htdocs/resources/xml/en/consolidated. xml&xslt=htdocs/resources/xsl/en/taliban-r.xsl

Details of accounts resembling any of the individuals/entities in the lists shall be reported to FIU-IND apart from advising Ministry of Home Affairs as required under UAPA notification dated August 27, 2009. In addition to the above, other UNSCRs circulated by the Reserve Bank in respect of any other jurisdictions/ entities from time to time shall also be taken note of.

Freezing of Assets under Section 51A of Unlawful Activities (Prevention) Act, 1967

The procedure laid down in the UAPA Order dated August 27, 2009 shall be strictly followed and meticulous compliance with the Order issued by the Government shall be ensured.

Jurisdictions that do not or insufficiently apply the FATF Recommendations

1. FATF Statements circulated by Reserve Bank of India from time to time, and publicly available information, for identifying countries, which do not or insufficiently apply the FATF Recommendations, shall be considered. Risks arising from the deficiencies in AML/CFT regime of the jurisdictions included in the FATF Statement shall be considered
2. Special attention shall be given 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
3. 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 shall be examined, and written findings together with all documents shall be retained and shall be made available to Reserve Bank/other relevant authorities, on request

Other Instructions Secrecy Obligations and Sharing Information

Newtap Finance Private Limited Ltd shall maintain confidentiality of information as provided in Section 45NB of RBI Act 1934.

CDD Procedure and sharing KYC information with Central KYC Records Registry (CKYCR)

Government of India has authorized the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI), to act as, and to perform the functions of the CKYCR vide Gazette Notification S.O. 3183(E) dated November 26, 2015. In terms of provision of Rule 9(1A) of PML Rules, Newtap Finance Private Limited Ltd shall capture customer’s KYC records and upload onto CKYCR within 10 days of commencement of an account-based relationship with the customer. Operational Guidelines for uploading the KYC data have been released by CERSAI.

1. Newtap Finance Private Limited Ltd 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 The templates may be revised from time to time, as may be required and released by CERSAI.
2. Once KYC Identifier is generated by CKYCR, Newtap Finance Private Limited Ltd shall ensure that the same is communicated to the individual/LE as the case may be
3. In order to ensure that all KYC records are incrementally uploaded on to CKYCR, Newtap Finance Private Limited Ltd shall upload/update the KYC data pertaining to accounts of individual customers and LEs at the time of periodic updation, or earlier, when the updated KYC information is obtained/received from the
4. Newtap Finance Private Limited Ltd shall ensure that during periodic updation, the customers are migrated to the current CDD standard
5. Where a customer, for the purposes of establishing an account-based relationship, submits a KYC Identifier to Newtap Finance Private Limited Ltd, with an explicit consent to download records from CKYCR, then Newtap Finance Private Limited Ltd 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 –
6. there is a change in the information of the customer as existing in the records of CKYCR;
7. the current address of the customer is required to be verified; the RE 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.

Collection of Account Payee Cheques

Account payee cheques for any person other than the payee constituent shall not be collected.

1. A Unique Customer Identification Code (UCIC) shall be allotted while entering new relationships with individual customers as also the existing customers
2. Newtap Finance Private Limited Ltd shall not issue UCIC to all walk-in/occasional customers such as buyers of pre-paid instruments/purchasers of third-party products provided it is ensured that there is adequate mechanism to identify such walk-in customers who have frequent transactions with the Company and ensure that they are allotted UCIC

Introduction of New Technologies –Smart Cards/Gift Cards/Mobile Wallet/ Net Banking/ Mobile Banking etc.

Adequate attention shall be paid by Newtap Finance Private Limited Ltd to any money-laundering and financing of terrorism threats that may arise from new or developing technologies and it shall be ensured that appropriate KYC procedures issued from time to time are duly applied before introducing new products/services/technologies.

Issue and Payment of Demand Drafts, etc.

Any remittance of funds by way of demand draft, mail/telegraphic transfer/NEFT/IMPS or any other mode for value of rupees fifty thousand and above shall be effected by debit to the customer’s account or against cheques and not against cash payment.

Quoting of PAN

Permanent account number (PAN) of customers shall be obtained and verified while undertaking transactions as per the provisions of Income Tax Rule 114B applicable to banking companies, as amended from time to time. Form 60 shall be obtained from persons who do not have PAN.

Selling Third Party Products

Newtap Finance Private Limited Ltd acting as agents while selling third party products as per regulations in force from time to time shall comply with the following aspects for the purpose of these directions:

1. Transaction details of sale of third-party products and related records shall be maintained as prescribed in “Record Management” of this policy
2. AML software capable of capturing, generating, and analyzing alerts for the purpose of filing CTR/STR in respect of transactions relating to third party products with customers including walk-in customers shall be available
3. Transactions involving rupees fifty thousand and above shall be undertaken only by:
   - Debit to customers’ account or against cheques; and
   - Obtaining and verifying the PAN given by the account based as well as walk-in customers

Hiring of Employees and Employee training

1. Adequate screening mechanism as an integral part of their personnel recruitment/hiring process shall be put in place
2. On-going employee training programme shall be put in place so that the members of staff are adequately trained in AML/CFT policy. The focus of the training shall be different 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. Proper staffing of the audit function with persons adequately trained and well-versed in AML/CFT policies of the company, regulation and related issues shall be ensured

Adherence to Know Your Customer (KYC) guidelines by Newtap Finance Private Limited Ltd and persons authorized by Newtap Finance Private Limited Ltd including brokers/agents etc.

1. Persons authorized by the company for collecting loan repayments and their brokers/agents or the like, shall be fully compliant with the KYC guidelines applicable to the company
2. All information shall be made available to the Reserve Bank of India to verify the compliance with the KYC guidelines and accept full consequences of any violation by the persons authorized by the company including brokers/agents who are operating on their behalf
3. The books of accounts of persons authorized by the company including brokers/agents or the like, so far as they relate to brokerage functions of the company, shall be made available for audit and inspection whenever