KYC & AML Policy - Swastik Finance Limited

Introduction

As per RBI Know Your Customer (KYC) Direction, 2016 and other applicable RBI norms, all NBFCs and Financial Institutions are required to maintain a KYC and Anti-Money Laundering Policy.

Money Laundering: Any act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to originate from legitimate sources.

Swastik Finance Limited has prepared this policy to comply with applicable regulations and to maintain uniformity in document collection and verification across all branches.

Objectives of the Policy

Lay down customer acceptance criteria based on RBI KYC norms.
Establish identification procedures for individuals and non-individuals.
Monitor suspicious and high-value transactions.
Develop due diligence and reporting mechanisms.
Prevent the Company from being used for money laundering.
Ensure compliance with applicable laws and regulations.

Key Definitions

Customer

A person engaged in any financial transaction or activity with the Company.

Suspicious Transaction

        A transaction that appears unusual, lacks economic rationale, or may involve proceeds of crime or terrorist financing.
      

Politically Exposed Persons (PEPs)

Individuals entrusted with prominent public functions in a foreign country such as heads of state, politicians, senior military officers, or executives of state-owned corporations.

Money Laundering

Any process connected with proceeds of crime including concealment, possession, acquisition, or projecting it as untainted property.

KYC & AML Standards

#	Standard
1	Customer Acceptance
2	Customer Identification
3	Risk Management
4	Monitoring of Transactions & Due Diligence
5	AML Initiatives

Customer Acceptance Policy

No anonymous or fictitious accounts shall be opened.
Customers shall be categorized into low, medium, and high risk.
Unique Customer IDs shall be assigned.
Customer identities shall be verified against sanction lists.
Accounts may be closed if customers fail to cooperate with due diligence.

Restrictions on Lending

Loans to blacklisted customers are prohibited.
High-risk lending shall be avoided or reduced.
Existing KYC non-compliant relationships may be terminated.

Customer Identification Procedure

The Company shall follow RBI prescribed customer identification procedures. Aadhaar-based e-KYC and offline verification may be used for identity verification.

Information collected from customers shall remain confidential and used only for regulatory purposes.

Risk Management

Loans shall be categorized as low, medium, or high risk.
Credit score analysis is recommended for high-value loans.
Strict KYC compliance shall be ensured.
Internal audit teams shall review risk aspects periodically.

Monitoring Transactions & Due Diligence

Transactions above ₹20,000 are subject to monitoring and due diligence. Enhanced due diligence is mandatory for loans exceeding ₹40,000.

Required Documents

Valid Customer Proof (VCP)
Recent Photograph
Contact Details
Email ID
Additional documents as per scheme requirements

        Suspicious Transaction Reports (STRs) shall be filed with FIU-IND within 7 days of identification.
      

AML Initiatives

Best governance practices
Risk assessment and mitigation
Customer due diligence
Transaction monitoring
Continuous improvement and testing
Internal and external audits

Annexure I - Valid Customer Proof

Required Documents	Status
PAN Card	Mandatory
ID Proof of Applicant & Guarantor	Mandatory
Bank Account Copy	Mandatory
Utility Bill / Address Proof	If address missing in VCP

Annexure II - Reasons for Suspicion

Persistent avoidance of document submission.
Unexpected flow of income.
Use of fake documents.
Frequent large transactions without justification.
Hesitation in providing bank details.
Frequent address changes without reason.
Counterfeit currency transactions.
Attempting to avoid due diligence procedures.

Conclusion

Swastik Finance Limited is committed to maintaining the highest standards of compliance, transparency, and ethical conduct in accordance with RBI KYC and AML regulations.