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KRAZYBEE SERVICES PRIVATE LIMITED

KYC - Policy

INTRODUCTION

Reserve Bank of India (“RBI”) has issued guidelines on “Know Your Customer (“KYC”) and Anti Money Laundering (“AML”) Standards for Non-Banking Finance Companies (“NBFC”) thereby setting standards for prevention of money laundering activities and corporate practices while dealing with their customers and KrazyBee Services Private Limited (“Company”) hereby adopts all the best practices prescribed by RBI from time to time and also undertakes to make appropriate modifications, if any, necessary to this Policy to conform to the standards so prescribed. This Policy is applicable across all branches / business segments of the Company, and its financial subsidiaries and is to be read in conjunction with related operational guidelines issued from time to time. The contents of the Policy shall always be read in tandem/auto-corrected with the changes/modifications which shall be advised by RBI from time to time.


The Company endeavors to frame a proper Policy framework on KYC and AML measures. The Company is committed for transparency and fairness in dealing with all stakeholders and in ensuring adherence to all laws and regulations in India. The Company shall ensure that the information collected from the Customer for any purpose would be kept as confidential and not divulge any details thereof for cross selling or any other purposes. The Company commits that information sought from the Customer is relevant to the perceived risk, is not intrusive, and is inconformity with the guidelines issued in this regard. Any other information from the Customer shall be sought separately with his /her consent and after effective rendering of services as per the terms of Company’s Privacy Policy.


The Company shall also communicate its KYC norms to its customers, from time to time. The Company’s Board of Directors and the management team are responsible for implementing the KYC norms hereinafter detailed, and also to ensure that its operations reflect its initiatives to prevent money laundering activities.


For the purpose of this Policy, a “Customer” shall be defined as:


  • A person or entity that maintains and/or has a business relationship with the Company;

  • One on whose behalf such relationship is maintained (i.e. the beneficial owner);

  • beneficiaries of transactions conducted by professional intermediaries; and;

  • Any person or entity connected with a financial transaction which can pose significant reputation or other risks to the Company, say, a wire transfer or issue of a high value demand draft as a single transaction

OBJECTIVE

The objective of this Policy is to prevent the Company from being used, intentionally or unintentionally, by criminal elements for money laundering activities. KYC procedures also enable the Company to know/understand their customers and their financial dealings better which in turn help the Company manage its and their risks prudently.


The Company is hereunder framing its KYC and AML policies (“Policy”) incorporating the following four key elements:


1.

Customer Acceptance Policy

2.

Customer Identification Procedures;

3.

Monitoring of Transactions; and

4.

Risk management.

CUSTOMER ACCEPTANCE POLICY

The guidelines for Customer Acceptance Policy (“CAP”) for the Company are as given below:

1.

No account will be opened in anonymous or fictitious/ benami name(s).

2.

The Company shall classify customers into various risk categories – “High, Medium and Low” and based on risk perception decide on acceptance criteria for each Customer category.

3.

The Company shall accept customers after verifying their identity as laid down in Customer identification procedures.

4.

While carrying out due diligence of the Customer, the Company shall ensure that the procedure adopted shall not result in denial of services to genuine customers.

5.

For the purpose of risk categorisation of Customer, the Company shall obtain the relevant information from the Customer at the time of account opening.

6.

For the purpose of risk categorisation of Customer, the Company shall obtain the relevant information from the Customer at the time of account opening.

7.

The Company shall specify the documentation requirements and other information to be collected in respect of different categories of customers depending on perceived risk and keeping in mind the requirements of Prevention of Money Laundering (“PML”) Act, 2002 and guidelines issued by Reserve Bank from time to time;

8.

The Company shall not open an account or close an existing loan account where the Company is unable to apply appropriate Customer due diligence measures i.e. the Company is unable to verify the identity and /or obtain documents required as per the risk categorization due to non-cooperation of the Customer or non-reliability of the data/information furnished to the Company.

9.

The Company shall perform necessary checks before opening a new loan account so as to ensure that the identity of the Customer does not match with any person with known criminal background or with banned entities such as individual terrorists or terrorist organizations, etc.

10.

The Company shall prepare a profile for each new Customer based on risk categorization.

11.

For the purpose of risk categorization, individuals (other than High Net Worth) and entities whose identities and sources of wealth can be easily identified and transactions in whose accounts by and large conform to the known profile, shall be categorized as low risk by the Company. Illustrative examples of a low risk Customer of the Company would be salaried employees whose salary structures are well defined, people belonging to lower economic strata of the society whose accounts show small balances and low turnover, Government departments and Government owned companies, regulators and statutory bodies etc. In such cases, the Policy may require that only the basic requirements of verifying the identity and location of the Customer are to be met. Customers that are likely to pose a higher than average risk to the Company will be categorized as medium or high risk depending on Customer's background, nature and location of activity, country of origin, sources of funds and his client profile etc. The Company may apply enhanced due diligence measures based on the risk assessment, thereby requiring intensive ‘due diligence’ for higher risk customers, especially those for whom the sources of funds are not clear. Examples of customers for which Company may undertake higher due diligence are as under:


1.

non-resident Indian,

2.

high net worthin dividuals,

3.

trusts, charities, NGOs and organizations receiving donations,

4.

companies having close family shareholding or beneficial ownership,

5.

firms with 'sleeping partners',

6.

PEP;

7.

PEPs of foreign origin,

8.

non-face to face customers, and

11.

Adoption of Customer acceptance Policy and its implementation shall not become too restrictive and shall not result in denial of financial services to general public, especially to those, who are financially or socially disadvantaged.

12.

As per Circular No. DNBS(PD)CC.No.193/03.10.42/2010-11, the Company does not allow opening and/or holding of an account on behalf of a client/s by professional intermediaries, like Lawyers and Chartered Accountants, etc., who are unable to disclose true identity of the owner of the account/funds due to any professional obligation of Customer confidentiality. Further, any professional intermediary who is under any obligation that inhibits the Company’s ability to know and verify the true identity of the client on whose behalf the account is held or beneficial ownership of the account or understand true nature and purpose of transaction/s, should not be allowed to open an account on behalf of a client.

CUSTOMER IDENTIFICATION PROCEDURE

The Policy clearly spells out the Customer Identification Procedure (“CIP”) to be carried out at different stages by the Company i.e. while establishing a business relationship; carrying out a financial transaction or when the Company has a doubt about the authenticity/veracity or the adequacy of the previously obtained Customer identification data. Customer identification means identifying the Customer and verifying his/ her identity by using reliable, independent source documents, data or information. The Company shall obtain sufficient information necessary to establish, to its satisfaction, the identity of each new Customer, whether regular or occasional, and the purpose of the intended nature of business relationship. Being satisfied means that the Company will be able to satisfy the competent authorities that due diligence was observed based on the risk profile of the Customer in compliance with the extant guidelines in place. Such risk based approach is considered necessary to avoid disproportionate cost to Company and a burdensome regime for the customers. Besides risk perception, the nature of information/documents required would also depend on the type of Customer (individual, corporate, etc.).


For customers that are natural persons, the Company shall obtain sufficient identification data to verify the identity of the Customer, his address/location, and also his recent photograph. For customers that are legal persons or entities, the Company shall:


1.

verify the legal status of the legal person / entity through proper and relevant documents;

2.

verify that any person purporting to act on behalf of the legal person/entity is so authorized and identify and verify the identity of that person;

3.

Understand the ownership and control structure of the Customer and determine the natural persons, who ultimately control the legal person.

4.

The Company shall take reasonable measures to identify the beneficial owner(s) and verify his/her/their identity in a manner so that it is satisfied that it knows who the beneficial owner(s)is/are.

5.

An indicative list of the nature and type of documents/information that shall be relied upon for Customer identification by the Company is given in Annexure-I.


The Company shall periodically review the documentation requirements keeping in view the emerging business requirements. Senior Official(s) in charge of this Policy, i.e. Compliance Head and COO are empowered to make amendments to the list of such documents required for Customer identification in consultation with the sales and distribution channels and compliance team.


Customer Identification Procedure will be carried out by the Company at different stages i.e.


1.

While establishing a business relationship(or);

2.

Carrying out a financial transaction(or);

3.

Where the Company has a doubt about the authenticity/veracity(or);

4.

Inadequacy of the previously obtained Customer identification data, if any;

5.

When the Company feels it is necessary to obtain additional information from the existing customers based on the conduct or behavior of the account.

No deviations or exemptions shall normally be permitted in the documents specified for loan account opening by the Company. In case of any extreme cases of exceptions, concurrence of Compliance Head shall be obtained duly recording the reasons for the same.


ALLOTMENT OF UNIQUE CUSTOMER IDENTIFICATION CODE

The Company will allot a Unique Customer Identification Code (“UCIC”) to all its new customers while entering new relationships with borrowers. The Company will use this UCIC will be used to identify customers, track the facilities availed, monitor financial transactions in a holistic manner and enable the Company to have a better approach to risk profiling of its customers.


MONITORING OF TRANSACTIONS

The Company shall monitor of its lending activities and will pay special attention to all complex, unusually large transactions and all unusual patterns which have no apparent economic or visible lawful purpose.


The Company does not accept any deposits. Most of the Company’s loans are small term based EMI loans across all categories of borrowers. Hence the transactions with the Company will at all times be restricted to the EMI/loan repayable over the tenor of the loan. No other transactions what so ever nature other than repayment of loan with interest will be carried out by the Customer with the Company.


The permanent correct address shall mean the address at which a person usually resides and can be taken as the address as mentioned in a utility bill or any other document accepted by the Company for verification of the address of the Customer. In case utility bill is not in the name of the Customer but is close relative: wife, son, daughter and parents etc. who live with their husband, father/mother and son, the Company will obtain an identity document and a utility bill of the relative with whom the prospective Customer is living along with a declaration from the relative that the said person (prospective Customer) is arelativeandisstayingwithhim/her.TheCompanywilluseanysupplementaryevidencesuchasa letter received through post for further verification of the address.


Section 3 of the PML Act, 2002, defines the “offence of money laundering” as:


“Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money laundering”.

The Company is dedicated and committed to preventing such offences of money laundering. All customers are advised to refrain from such offences of money laundering.


All transactions of suspicious nature and / or any other type of transaction notified under section 12 of the PML Act, 2002, shall be reported by the Company to the appropriate law enforcement authority by the Company.


PRESERVATION OF RECORDS

The Company maintains the following information in respect of transactions referred to in rule 3:


1.

The nature of the transactions;

2.

The amount of the transaction and the currency in which it was denominated;

3.

The date on which the transaction was conducted; and

4.

The parties to the transaction.

The Company will maintain the records pertaining to the identification of the Customer and his address (e.g. copies of documents like passports, identity cards, driving licenses, PAN, utility bills etc.) obtained while opening the loan account and during the course of business relationship, are properly preserved for at least ten years after the business relationship is ended. The identification records and transaction data shall be made available by the Company to the competent authorities immediately upon request.


REPORTING TO FINANCIAL INTELLIGENCE UNIT-INDIA

The Company will report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit-India (“FIU-IND”). The Company shall initiate urgent steps to ensure electronic filing of cash transaction report (CTR) .The Company shall not put any restrictions on operations in the accounts where an STR has been made. However, it shall be ensured that there is no tipping off to the Customer at any level.


The Company will pay special attention to all complex, unusual large transactions and all unusual patterns of transactions, which have no apparent economic or visible lawful purpose. It is further clarified that the background including all documents/office records/memorandums pertaining to such transactions and purpose thereof will, as far as possible, be examined and the findings shall be properly recorded.


It is likely that in some cases transactions are abandoned/ aborted by customers on being asked to give some details or to provide documents. The Company shall report all such attempted transactions in STRs, even if not completed by customers, irrespective of the amount of the transaction.


The Company will make STRs if they have reasonable ground to believe that the transaction involve proceeds of crime generally irrespective of the amount of transaction and/or the threshold limit envisaged for predicate offences in part B of Schedule of PML Act, 2002.


In the context of creating KYC/AML awareness among the staff and for generating alerts for suspicious transactions, the Company will consider the indicative list of suspicious activities contained in Annexure II.


INTRODUCTION OF NEW TECHNOLOGIES - LOAN CARDS

The Company shall pay special attention to any money laundering threats that shall arise from new or developing technologies including internet transactions that might favour anonymity, and take measures, if needed, to prevent their use in money laundering schemes. The Company is engaged in the business of issuing a variety of Electronic Cards that are used by customers for buying goods and services. The Company shall undertake a full KYC for such customers / borrowers as well.


COMBATING FINANCING OF TERRORISM

1.

In terms of PMLA Rules, suspicious transaction shall include inter alia transactions which give rise to a reasonable ground of suspicion that these may involve financing of the activities relating to terrorism. The Company, therefore, shall develop suitable mechanism through appropriate Policy and swift identification of the transactions and making suitable reports to the Financial Intelligence Unit – India (FIU-IND) on priority.

2.

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.

APPOINTMENT OF COMPLIANCE/PRINCIPAL OFFICER

The Company Mr. Vivek Veda, Compliance Officer, as the Principal Officer of Compliance for the Company. Principal Officer is located at the head office of the Company and is responsible for monitoring and reporting of all transactions and sharing of information as required under the law.


This document is the property of the Company. It contains information that is internal to the Company and is of competitive value and sensitive in nature.


ANNEXURE - I

Customer Identification Procedure features to be verified and documents that shall be obtained from customers by the Company:


KYC CHECKLIST

Features to be verified and documents that shall be obtained from customers by the Company


Features

Documents

Identity Proof (Individual)

1.Aadhar

2.Passport

3.Photo PAN card

4.Voter’s Identity Card / UID Aadhar Card

5.Laminated Driving license - Permanent. For a Driving license coming in a booklet form (Not laminated) to be acceptable as KYC document, an OSV done by RCL employee on the photocopy of the Driving license would be mandatory.



Address Proof (Individual)

1.Telephone Bill

2.Aadhar

3.Voter ID

4.Electricity Bill

5.Voter’s Identity Card

6.Laminated Driving license - Permanent. For a Driving license coming in a booklet form (Not laminated) to be acceptable as KYC document, an OSV done by RCL employee on the photocopy of the Driving license would be mandatory.