Reserve Bank of India (RBI) on February 25, 2016 (bearing ref no. RBI/DBR/2015-16/18 DBR.AML.BC. No.81/14.01.001/2015-16) notified the Know your customer (KYC) Directions, 2016 (KYC Directions, 2016), inter alia, directing that every Regulated Entity shall have a Know your customer (KYC) Policy duly approved by the Board of Directors. These directions have been issued by the RBI in terms of the provisions of Prevention of Money-Laundering Act, 2002 (PMLA) and the Prevention of Money-Laundering (Maintenance of Records) Rules 2005.
LivQuik Technology (India) Private Limited (QuikWallet) is essentially an Information Technology Service providing company which holds Licence from RBI for Semi-Closed prepaid Payment Instrument.
Accordingly, the following KYC Policy has been adopted by the Board suitably, superseding the existing KYC & PMLA Policy of the Company, as amended from time to time.
Money laundering is the process which criminal investors to cover the real origin and ownership of dirty or illegal money emanating from criminal illegal activities, and thereby render the prosecution and confiscation of funds so generated, impossible.
The rationale, therefore, would be to reflect the global resolve to prevent and fight money laundering activity, by establishing governing standards to insulate the Company from being used as a component of financial system to launder money. In the light of above, the objectives have been laid down as enumerated below:
(a) Enable the Company to conduct clean, commercial business, conforming to standards set by RBI.
(b) To follow, without exception, the uniformly accepted standards used for KYC compliance.
(c) To report and take suitable action, upon detecting the suspicious activity involving shades of money laundering as directed by regulators like RBI from time to time.
(d) To comply with applicable laws in India with reference to Money laundering and adhere to standards accepted by the financial world on the subject.
The activity is an involvement in any transactions/or series of transactions that is designed to disguise the nature/source of proceeds derived from illegal activities
It is important for all staff members to be conversant and be absolutely familiar with the money laundering process (described below) as they must be vigilant all the times and should any of the aspects involved in money laundering process touch/surface our business they must be able to read the danger signal and blow the whistle.
Identification of suspicious transactions, For identification of suspicious transaction, we should take the precautions which would be exercised by a man of normal prudence. Some of the indicators of suspicious transaction are:
i. Involvement of funds for illegal activity.
ii. Intending to hide or disguise assets derived from illegal activities.
iii. Intention to evade anti-money laundering guidelines.
iv. Customer has no business or apparent lawful purpose and has no linkage with such business.
V. Transaction by List of Individual in UN Sanction list
The Company shall appoint an official of fairly senior cadre with sufficient operational experience an investigative mind. He would have the necessary freedom to act on his own authority.
By Rule 8 of Notification No. 9/2005 dated 1-7- 2005 require the Principal Officer of an intermediary to furnish the information of the suspicious transactions to Director, FIU-IND within 7 working days of establishment of suspicion at the level of Principal Officer
The Principal Officer’s role would be to maintain controls and procedures aimed at deterring criminal elements from using services of the intermediary and implement this policy. He will also be instrumental in adhering to KYC principle and effective customer identification and should provide necessary guidance to operating staff. His vigilance in computerized and non-computerized transactions and track patterns would be important.
As required by the Prevention of Money Laundering Act, 2002 the Compliance Officer of the Company Mr. Mohit Lalvani, Managing Director will be the Principal Officer.
In PMLA 2002 Customer/Merchant due diligence is required. For the acceptance of the new customers/Merchant the following shall be taken into the account:
The importance of KYC approach, a very essential and preliminary aspect, need not be over emphasized. The issuance of a comprehensive circular by Reserve Bank of India in on this approach depicts the seriousness and recognition attached to KYC principle in guiding the intermediary in this regard.
(a) To establish procedures to verify the bonafide identification of individuals/corporate accounts.
(b) To establish process and procedures to monitor high value transactions and suspicious transactions.
(c) Establish systems for conducting due diligence and reporting of such activities.
LivQuik Technology (India) Private Limited The focus of KYC is ‘back to basics’ where elaborate standard for obtaining detailed information regarding new customers at the initial stage and that of existing customers over a period of time would be achieved. This would help in establishing the genuineness and bonafides of customers and keeping a watch over transactions, particularly those of a suspicious nature, and reporting these to the regulators/law enforcers.
(A) Individual Accounts:
For Legal name and any other name used: Any one of the following document to be considered as Identity Proofs:
(i) Passport (ii) PAN Card (iii) Voter identity card (iv)Driving license (v) Aadhar Card
For Correct permanent address: Any one of the following document to be considered as Residential Proofs:
(i) Telephone bill (ii) Bank account statement (iii) Letter from recognized public authority (iv) Electricity bill (v) Aadhar card (vi) Letter from employer
(b) Other than Individual Accounts:
Accounts of the following customers will be opened by the Company after obtaining documents stated against their names and any document/introduction the Company may feel necessary
-Company: Certificate of Incorporation, Cancel Cheque, Pan Card
-Society/Association/Clubs: certificate of registrations in the case of registered clubs, societies and associations, Pan Card, Cancel Cheque
-HUF: Declaration from the Karta, Pan Card, Cancel Cheque
-Trust A copy of registration certificate, Pan card, Cancel Cheque
-Firms In the case of partnership firm, partnership deed, partnership letters and introduction from a person known to the Company, shop & Establishment License
Operating staff should exercise due diligence and care while opening an account in terms of RBI guidelines/regulations and legal compliance in force.
“Behaviour which to the eye of the observer appears to be unusual or out of context in the circumstances within which it is observed.”
Money launderers involve many types of transactions while disguising the dirty money and layering it. So it is difficult to define a suspicious transaction. The key to detect such suspicious transactions is to knowing sufficiently about customer to recognize that a transaction/or series of them is unusual.
In reporting suspicious transactions the Principal Officer who will get himself satisfied about existence of a suspicious activity/nature and then himself report to Director, FIU- IND.
Further course of action is to be decided by the Management in consultation with Solicitors to take up the matter with the appropriate law enforcing authorities designated under the relevant laws governing such activities.
For the ongoing monitoring of accounts as required under PMLA 2002 the Company shall continuously monitoring for the identification and detection of apparently abnormal transactions, which shall be based on Customer’s transaction flow and pattern for identifying and detecting such transactions.
List of circumstances which may be treated nature of suspicious transactions as is given below. This list is only illustrative and whether a particular transaction is suspicious or not will depend upon the background, details of the transactions and other facts and circumstances:
• Customer whose identity verification seems difficult;
• Substantial increase in activity without any apparent cause;
• Large number of accounts having common parameters such as common address / email addresses;
• Sudden activity after long time in accounts;
• Source of funds are doubtful or inconsistency in payment pattern;
• Unusual and large recharge made by an customer;
• Multiple transactions of value just below the threshold limit specified in PMLA so as to avoid possible reporting;
List is given on following Link http://fiuindia.gov.in/files/misc/unscsanction.html
LivQuik will monitor each Deposit made into QuikWallet Account to monitor high-risk & fraudulent transactions for which LivQuik has setup its own Risk Rules. If your deposit is classified as a high-risk transaction or is suspected of fraud, LivQuik will place a hold on the deposit and may ask you for more information on you and your funding source. LivQuik will conduct a review and either clear or cancel the deposit. If the deposit is cleared, LivQuik will notify you and update your QuikWallet Account. Otherwise, LivQuik will cancel the deposit and the funds will be forfeited by LivQuik. The said funds will be refundable only to source account upon valid demand raised by holder of source account. LivQuik will notify you by email and/or in the account history tab of your LivQuik account if the deposit is cancelled.
Further if Complaint is raised by customer with cyber-crime cell. The said fraudster account will be blocked immediately after intimation to LivQuik and outstanding amount in wallet will be refunded back to source within 7-10 working days. All information related to that wallet will be provided to cyber-crime cell for further investigation.
In terms of the Companies Act, 2013, records such as Transaction Logs, Forms, vouchers, ledgers, registers, other documentation etc., pertaining to transactions for specified periods are required to be maintained. In addition, the following documents in respect of accounts, which have been reported for suspicious activities, are required to be retained at the end of business relationship with the customer, which in any case shall not be less than 10 years.
• Customer Profiles
• Reports made to government authorities concerning suspicious customer activity relating to possible money laundering conduct together with supporting documentation.
• Any other documents required to be retained under applicable money laundering laws/regulations.
All financial transactions records are to be retained for at least 10 years after the transaction has taken place and are to be made available for scrutiny of Law enforcing agencies, Audit functionaries/Inspectors as well as Regulators i.e RBI/FIU-IND and other authorities, as and when required.
Company shall periodically conduct/organize the training for the new staff, front line staff, supervisory staff, controllers to ensure that the operating and management staff understands the requirements and responsibilities under PMLA so that strict adherence of customer due diligence requirements for establishment of new accounts, transaction monitoring and reporting of suspicious transactions to the Money Laundering Control Officer or any other designated officer can be achieved.
The Anti Money Laundering (AML) program is subject to periodic audit specifically with regard to testing its adequacy to meet the compliance requirements. The audit/testing be conducted by company’s personnel not involved in framing or implementing the AML program or it may be done by a qualified third party. The report of such an audit/testing would be placed before the senior management for making suitable modifications/improvements in the AML program.