1. Introduction
The Reserve Bank of India ("RBI") has prescribed guidelines on Know Your Customer (KYC) Directions as updated from time to time for all Non Banking Financial Companies (NBFC) on the basis of which Know Your Customer (KYC) Policy shall be put in place by NBFC's. The objective of this Policy is to ensure that NBFC conducts its lending and financial activities in full compliance with applicable laws and regulations, while preventing money laundering, terrorist financing, and other unlawful activities.
Kalpathi Investments Private Limited, (KIPL / Company) is a Non-Banking Financial (Non-Deposit Accepting or Holding) Investment and Credit Company, which is closely held and funded exclusively by the Promoters without any external Borrowings/ Deposits for investments in the startup ecosystem based on referrals and our own internal validations of the promoters and their ventures. Now the Company is intending to focus on the lending activities.
2. Objectives of the Policy
(a) To prevent the Company from being used, intentionally or unintentionally, for unlawful activities such as money laundering or terrorist financing.
(b) To establish a clear framework for customer identification, verification, and risk categorization.
(c) To comply with applicable statutory and regulatory requirements.
(d) To safeguard the reputation of the Company and maintain integrity in financial dealing.
3. Key Elements of KYC Policy
The KYC Policy of the Company comprises the following four key elements:
1. Customer Acceptance Policy (CAP)
2. Customer Identification Procedures (CIP)
3. Monitoring of Transactions
4. Risk Management
4. Customer Acceptance Policy (CAP)
(a) No account or loan relationship shall be opened in anonymous or fictitious/benami names.
(b) Sufficient information shall be obtained to establish the identity of the customer and the purpose/nature of the loan or financial transaction.
(c) Customers shall be categorized as Low Risk, Medium Risk, and High Risk based on profile and background.
(d) Enhanced due diligence shall be applied for high-risk customers (e.g., PEPs, NRIs, NGOs, foreign entities).
(e) The Company shall not undertake lending activities with individuals/entities whose identity cannot be verified as per RBI guidelines.
5. Customer Identification Procedures (CIP)
(a) Customer identity and address shall be verified at the time of onboarding, during the course of relationship and whenever required by law.
(b) Identification documents to be obtained include:
a. Proof of Identity (e.g., PAN, Aadhaar, Passport, Voter ID, Driving License).
b. Proof of Address (e.g., Utility Bill, Bank Statement, Aadhaar, Passport).
(c) For legal entities: Certificate of Incorporation, Memorandum & Articles of Association, Board Resolution, PAN, Authorized Signatory Identification.
(d) Permanent Account Number (PAN) and Aadhaar number shall be mandatorily collected as per RBI/GoI regulations.
6. Monitoring of Transactions
(a) Transactions shall be monitored on an ongoing basis to ensure they are consistent with the customer's profile, source of funds, and loan purpose.
(b) Unusual patterns, large value cash transactions, or transactions inconsistent with declared purpose shall be flagged and reported.
(c) All suspicious transactions shall be reported to the Financial Intelligence Unit-India (FIU-IND) under the Prevention of Money Laundering Act (PMLA), 2002.
7. Risk Management
(a) Risk categorization of customers shall be carried out at the time of account opening and reviewed periodically.
(b) Low Risk Customers: Salaried employees with known income sources, government employees.
(c) Medium Risk Customers: Small business owners, self-employed individuals, with moderate transaction activity.
(d) High Risk Customers: Politically Exposed Persons (PEPs), non-residents, trusts, charities, companies with complex ownership structures.
(e) Enhanced Due Diligence (EDD) will be conducted for high-risk categories, including additional document checks, verification of source of funds, and closer monitoring.
8. Customer Due Diligence (CDD) Measures
(a) At Onboarding: Verify identity and address, obtain KYC documents, PAN, Aadhaar (where applicable).
(b) Ongoing Due Diligence: Periodic KYC updates (every 2 years for high-risk, 3 years for medium-risk, 4 years for low-risk customers).
(c) Beneficial Ownership Identification: For companies, partnerships, trusts – identify and verify ultimate beneficial owners holding more than 10% beneficial ownership.
9. Record Keeping
(a) Records of KYC documents and transaction history shall be maintained for a minimum period of 5 years after the end of business relationship or as prescribed by RBI/GoI.
(b) All electronic and physical records shall be securely stored to prevent unauthorized access.
10. Reporting Requirements
(a) Mr. R.Rangarajan, is designated as Principal Officer who shall be responsible for monitoring and reporting of all transactions and sharing of information as required under the law.
(b) The Company shall have a system of internal reporting of suspicious transactions and whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other and where such series of transactions take place within a month.
(c) Suspicious transactions, regardless of value, shall be reported promptly in compliance with RBI/FIU norms.
11. Compliance and Training
(a) The Principal Officer of the Company shall be responsible for overall KYC compliance, reporting, and liaison with regulatory authorities.
(b) All employees of the Company shall undergo periodic training programs on KYC/AML compliance.
(c) Internal audits shall periodically check adherence to KYC guidelines.
12. Review of Policy
(a) This Policy shall be reviewed at least once annually by the Board of Directors or whenever required due to regulatory updates.
(b) Any changes made by RBI, FIU or Government of India in KYC laws will be incorporated into the Policy.
