1. Objective of the AML Policy

The primary objectives of this AML Policy are:

• Prevent misuse of financial services for money laundering activities
• Detect and report suspicious transactions and activities
• Ensure compliance with RBI, PMLA, and FIU-IND requirements
• Protect the company from financial, legal, and reputational risks
• Promote transparency and ethical financial practices

2. Regulatory Framework

This AML Policy is framed in accordance with:

• Prevention of Money Laundering Act (PMLA), 2002
• RBI Master Direction - Know Your Customer (KYC) Direction, 2016
• Rules and notifications issued by FIU-IND
• Applicable RBI Digital Lending Guidelines

3. Customer Due Diligence (CDD)

Konark Finserv conducts Customer Due Diligence before onboarding customers and during the continuation of the lending relationship.

CDD Measures Include:

• Identity verification through KYC documents
• PAN and Aadhaar validation
• Bank account verification
• Mobile number authentication
• Fraud and blacklist screening
• Risk-based customer profiling

4. Risk-Based Approach

Customers are categorized into low, medium, or high-risk categories based on internal risk assessment parameters including:

• Occupation and source of income
• Geographical location
• Transaction behavior and repayment patterns
• Politically Exposed Person (PEP) status
• Regulatory alerts or suspicious indicators

Enhanced Due Diligence (EDD) procedures may be applied for high-risk customers or suspicious accounts.

5. Transaction Monitoring

Konark Finserv monitors transactions and account activities to identify suspicious or unusual behavior.

Monitoring Includes:

• Unusual loan repayment activities
• Multiple applications using common credentials
• Suspected identity fraud
• Rapid movement of funds
• Use of forged or manipulated documents

6. Suspicious Transaction Reporting (STR)

Any suspicious activity identified during customer onboarding or account monitoring may be reported to the Financial Intelligence Unit - India (FIU-IND) in accordance with applicable laws and reporting timelines.

• Suspicious Transaction Reports (STRs)
• Fraud monitoring and escalation
• Internal compliance review procedures

7. Record Maintenance

Konark Finserv maintains records related to customer identification, transactions, and suspicious activity reports as required under applicable laws.

• KYC and customer verification records
• Loan transaction details
• Audit logs and monitoring reports
• Regulatory reporting records

8. Employee Training & Compliance

Employees and authorized personnel are periodically trained on AML obligations, fraud prevention mechanisms, and regulatory compliance requirements.

• AML awareness programs
• Fraud detection training
• Compliance monitoring procedures
• Reporting and escalation protocols

9. Data Security & Confidentiality

Customer and transaction data collected for AML compliance purposes are handled securely and confidentially.

• Restricted access controls
• Encrypted data storage systems
• Secure digital verification processes
• Confidential regulatory reporting mechanisms

10. Non-Compliance & Enforcement

Konark Finserv reserves the right to reject, suspend, freeze, or terminate customer relationships in cases involving:

• False or misleading information
• Suspicious financial activities
• Forgery or identity fraud
• Violation of regulatory requirements

11. Policy Review & Amendments

This AML Policy shall be reviewed periodically and updated in line with RBI, FIU-IND, or legal/regulatory amendments.

• Periodic compliance audits
• Board-approved policy revisions
• Implementation of regulatory changes