Know Your Customer (KYC) Policy - India

1. Introduction and Regulatory Framework

NomercyX ("Company") implements a comprehensive Know Your Customer (KYC) program in compliance with Indian regulatory requirements. This policy ensures proper customer identification, verification, and ongoing monitoring to prevent money laundering, terrorist financing, and other financial crimes.

1.1 Regulatory Compliance

• Reserve Bank of India (RBI) Master Direction on KYC (Updated November 2024)
• Prevention of Money Laundering Act, 2002 (PMLA) and Rules 2005
• Foreign Exchange Management Act, 1999 (FEMA)
• Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016
• Information Technology Act, 2000 and Privacy Rules
• Companies Act, 2013 (for corporate customers)
• Income Tax Act, 1961 (PAN requirements)
• Unlawful Activities (Prevention) Act, 1967 (UAPA) - Updated November 2024

1.1A RBI KYC Amendments 2024

1.2 KYC Objectives

• Verify customer identity and address
• Assess customer risk profile
• Monitor transactions for suspicious activities
• Comply with regulatory reporting requirements
• Prevent identity theft and fraud
• Maintain accurate customer records

2. Customer Risk Categorization

2.1 Risk Categories

2.2 Risk Assessment Factors

• Customer Profile: Occupation, income source, business nature
• Geographic Risk: Customer location, transaction jurisdictions
• Product Risk: Services used, transaction patterns
• Channel Risk: Method of account opening and operation
• Transaction Risk: Volume, frequency, and complexity

3. KYC Documentation Requirements

3.1 Individual Customers - Indian Residents

Identity Proof (Any One)

• Aadhaar Card: Unique Identification Authority of India (UIDAI) issued
• PAN Card: Permanent Account Number (mandatory for transactions above ₹50,000)
• Passport: Valid Indian passport
• Voter ID Card: Election Commission of India issued
• Driving License: Valid driving license issued by RTO
• NREGA Job Card: With photograph
• Government Employee ID: With photograph

Address Proof (Any One)

• Aadhaar Card: If contains current address
• Utility Bills: Electricity, gas, telephone, water (not older than 3 months)
• Bank Statement: From scheduled commercial bank (last 3 months)
• Rent Agreement: Registered rent agreement with utility bill
• Property Tax Receipt: Municipal corporation issued
• Passport: If contains current address
• Voter ID Card: If contains current address

Income Proof (For High-Value Transactions)

• Salary Certificate: From employer with salary slips (last 3 months)
• Income Tax Returns: Last 2 years with computation
• Form 16: Tax deduction certificate
• Bank Statements: Showing regular income credits (6 months)
• Audited Financial Statements: For self-employed individuals

3.2 Non-Resident Indians (NRIs)

Additional Requirements for NRIs

• Passport: Valid Indian passport with current visa/residence permit
• Overseas Address Proof: Utility bill, bank statement, or rental agreement
• Employment Certificate: From overseas employer
• Income Proof: Salary certificate or tax returns from country of residence
• FEMA Declaration: Source of funds and purpose of investment
• Relationship Certificate: For family members (if applicable)

3.3 Corporate Customers

Company Documentation

• Certificate of Incorporation: From Registrar of Companies (ROC)
• Memorandum and Articles of Association
• PAN Card: Corporate PAN issued by Income Tax Department
• GST Registration Certificate: Goods and Services Tax registration
• Board Resolution: Authorizing account opening and signatories
• Power of Attorney: If applicable for authorized representatives
• List of Directors: Form DIR-12 filed with MCA
• Shareholding Pattern: Details of shareholders holding >25%

Beneficial Ownership Information

• Ultimate Beneficial Owners (UBOs): Individuals owning >25% shares or voting rights
• Control Structure: Details of control through other means
• KYC of UBOs: Complete KYC documentation for all UBOs
• Declaration: Signed declaration of beneficial ownership

Financial Information

• Audited Financial Statements: Last 2 years
• Income Tax Returns: Corporate tax returns (last 2 years)
• Bank Statements: Current account statements (6 months)
• Business Profile: Nature of business, turnover, major customers
• Source of Funds: Details of fund sources for transactions

4. KYC Verification Process

4.1 Document Verification

Aadhaar Verification

• eKYC: Electronic verification through UIDAI
• OTP Verification: One-time password sent to registered mobile
• Biometric Authentication: Fingerprint or iris verification
• Offline Verification: Using Aadhaar XML file with QR code

PAN Verification

• Online Verification: Through Income Tax Department database
• Name Matching: Exact match with other identity documents
• Status Check: Verification of active PAN status
• Mandatory Requirement: For all transactions above ₹50,000

4.2 In-Person Verification (IPV)

IPV is required for:

• High-risk customers
• Customers with transaction limits above ₹2 lakh
• Corporate customers and their authorized representatives
• Customers unable to provide standard KYC documents
• Suspicious or doubtful cases

IPV Process

• Physical meeting with customer at our office or authorized location
• Verification of original documents
• Photograph of customer with documents
• Completion of IPV certificate by authorized officer
• Recording of IPV details in customer file

4.3 Video-based Customer Identification Process (V-CIP)

As per RBI guidelines, V-CIP may be used for:

• Remote customer onboarding
• Customers in remote locations
• During pandemic or emergency situations
• Subject to specific RBI conditions and limitations

V-CIP Requirements

• Live video interaction with customer
• Real-time verification of documents
• Geo-tagging and time-stamping
• Recording of entire video session
• Additional verification through OTP or digital signature

5. KYC Compliance Levels

6. Ongoing Monitoring and Review

6.1 Periodic KYC Review

Review Process

• Automated system alerts for due reviews
• Customer notification for document updates
• Verification of updated information
• Risk rating reassessment
• Transaction pattern analysis
• Sanctions list screening

6.2 Transaction Monitoring

• Real-time Monitoring: Automated systems monitor all transactions
• Pattern Analysis: Detection of unusual transaction patterns
• Threshold Monitoring: Alerts for transactions exceeding limits
• Velocity Checks: Monitoring transaction frequency and volume
• Geographic Analysis: Monitoring transactions across locations

6.3 Customer Profile Updates

• Customers must inform of material changes within 30 days
• Address changes require fresh address proof
• Income changes may trigger limit reviews
• Occupation changes require documentation
• Corporate changes require board resolutions

7. Special Categories and Procedures

7.1 Politically Exposed Persons (PEPs)

PEP Due Diligence

• Senior management approval for account opening
• Enhanced source of wealth verification
• Ongoing monitoring of all transactions
• Regular review of relationship (every 6 months)
• Additional documentation requirements
• Heightened transaction monitoring

7.2 Trust and Foundation Accounts

Additional Requirements

• Trust Deed: Registered trust deed with objectives
• Registration Certificate: From appropriate authority
• 12A/80G Certificates: Tax exemption certificates (if applicable)
• FCRA Registration: For foreign contribution (if applicable)
• Trustee Details: Complete KYC of all trustees
• Beneficiary Information: Details of beneficiaries
• Source of Funds: Documentation of fund sources

7.3 Correspondent Banking

Enhanced Due Diligence for Banks

• Assessment of respondent bank's AML/CFT controls
• Verification of banking license and regulatory status
• Understanding of business and customer base
• Assessment of management and ownership
• Review of regulatory actions and penalties
• Ongoing monitoring of the relationship

8. Technology and Digital KYC

8.1 Digital KYC Solutions

• Aadhaar eKYC: Real-time verification through UIDAI
• DigiLocker Integration: Access to government-issued documents
• Video KYC: Remote verification through video calls
• Biometric Verification: Fingerprint and facial recognition
• AI-powered Document Verification: Automated document authenticity checks
• Blockchain KYC: Immutable KYC records

8.2 Data Security and Privacy

• Data Encryption: End-to-end encryption of sensitive data
• Access Controls: Role-based access to KYC information
• Audit Trails: Complete logging of data access and changes
• Data Localization: Storage of Indian customer data within India
• Privacy Compliance: Adherence to IT Act and privacy rules
• Secure Transmission: Secure channels for data transmission

8.3 KYC Utilities and Registries

• Integration with KYC Registration Agencies (KRAs)
• Central KYC Registry (CKYCR) compliance
• Sharing of KYC information across group entities
• Standardized KYC templates and formats
• Automated KYC data updates and synchronization

9. Non-Compliance and Remedial Measures

9.1 Consequences of Non-Compliance

Progressive Actions

• First Notice: Email/SMS reminder for pending KYC
• Second Notice: Formal notice with 30-day deadline
• Restriction: Limited services until compliance
• Suspension: Account suspension after deadline
• Closure: Account closure for persistent non-compliance

9.2 Customer Grievance Mechanism

• Dedicated KYC helpline and email support
• Online grievance portal for KYC issues
• Escalation matrix for unresolved complaints
• Regular review of KYC-related complaints
• Customer education on KYC requirements

9.3 Regulatory Reporting

• Monthly KYC compliance reports to RBI
• Annual KYC audit reports
• Suspicious transaction reports for KYC violations
• Regulatory inspection preparedness
• Compliance with regulatory queries and directions

10. Training and Awareness

10.1 Employee Training Program

• Induction Training: Comprehensive KYC training for new employees
• Regular Updates: Quarterly training on regulatory changes
• Role-specific Training: Specialized training for different functions
• Assessment and Certification: Regular testing and certification
• External Training: Participation in industry seminars and workshops

10.2 Customer Awareness

• KYC awareness campaigns and communications
• Educational content on website and mobile app
• Customer service support for KYC queries
• Regular updates on KYC requirements
• Multilingual KYC information and forms

11. Contact Information

11.1 Document Submission

• Online Portal: Secure document upload through customer portal
• Email: Encrypted email to kyc@nomercyx.com
• Physical Submission: At authorized service centers
• Courier: To registered office address