Raghunandan Money – Investment Khushiyon Ka.
PMLA Policy

PMLA Policy

 Anti Money Laundering Policy

Back ground

The Prevention of Money Laundering Act, 2002 came into effect from 1st July 2005. SEBI vide circular dated 18th January 2006 required market intermediaries to lay down policy framework for A nti Money Laundering measures to be followed. SEBI has also issued Master   Circular dated 19th December 2008 & circular CIR/MIRSD/1/2014 dt. 12.03.2014. Subsequently amended in Prevention of Money Laundering (Maintenance of Records) Rules, 2005 as per the gazette notification dated June 1, 2017.

 The   PMLA   2002   and    Rules   notified thereunder   impose an obligation on intermediaries to verify identity of clients, maintain records and furnish information to the Financial Intelligence Unit (FIU)-India.

What is Money  Laundering?

Money  Laundering defined as cleansing of dirty  money obtained from legitimate or illegitimate activities including drug trafficking, terrorism, organized crime,  fraud and  many  other  crimes  with  the  objective  of hiding its source  and  rendering it in legally  usable  form.  It is any act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources. The  process of  money  laundering  involves creating  a  web  of  financial transactions so as to hide the origin  of and true nature of these funds.

This is done three phases- placement Phase, Layering Phase & Integration Phase.


The Prevention of Money Laundering Act, 2002 (PMLA) forms the core of the legal framework put in place by India to combat money laundering. PMLA and the Rules notified there under came into force with effect from July 1, 2005.

The PMLA and rules notified there under impose obligation on banking companies, financial institution and intermediaries to verify identity of clients, maintain records and furnish information to FIU-INDIA. PMLA defines money laundering offence and provides for the freezing, seizure and confiscation of the proceeds of crime. Monitor / maintain record of all cash transactions of the value of more than Rs. 10 lacs or its equivalent in foreign currency.

Policy of Raghunandan Capital Private Limited

Raghunandan Capital Private Limited has resolved  that   it  would,  as  an  internal  policy,   take   adequate measures to prevent money laundering and  shall put  in place a frame  work  to report cash and  suspicious transactions to FIU as per the guidelines of PMLA Rules, 2002.

Implementation of this Policy

Mr. Rahil Uddin is the Principal Officer  who  is responsible for compliance of the provision of the PMLA and  AML Guidelines act as a central  reference point  and  play  an  active  role  in  identification & assessment of potentially  suspicious  transactions. Ensure that Group discharges its legal obligations to report suspicious transaction to the concerned authorities.

Rights and Powers of Principal Officer

The principal officer ensures that:-

  1. The PMLA Guidelines and the Board approved PMLA Policy is implemented effectively by the company.
  2. The identification and assessment of potentially suspicious transactions are done on the regular basis.
  3. The company is regularly updated regarding any changes/additions/modification in PMLA Provisions.
  4. The company reports the suspicious transactions to the concerned authorities within the specific time as per the PMLA policy.
  5. The company responds promptly to any request for information, including KYC related information, made by the regulators, FIR-IND and other statutory authorities. Any other responsibilities assigned. Designated director will implement the PMLA guidelines issued by SEBI time to time.

The main aspect of this policy is the customer due diligence process which  means:-

  1. Obtaining sufficient information about to the client in order to identify who  is the actual  beneficial  owner of the securities or on whose  behalf  transaction is conducted;
  2. Verify the  customers identity using  reliable  independent source  documents, data  or information;
  3. Conduct on-going due diligence and scrutiny of the account/client to ensure that the transaction conducted  are  consistent  with   the  clients’ background / financial status, its activities and risk profile.

The customer due diligence process includes three specific parameters:-

  • Elements of Client Due Diligence;
  • Client Identification Procedure;
  • Clients of special category (CSC)
  • Policy for acceptance of clients;
  • Risk Based Approach
  • Suspicious Transaction identification and reporting.

(A) Element of Client Due Diligence (CDD)

The CDD measures comprise the following:

  1. Obtaining sufficient information in order to identify persons who beneficially own or control the securities account. Whenever it is apparent that the securities acquired or maintained through an account are beneficially owned by a party other than the client, that party shall   be identified using   client identification and verification procedures. The beneficial owner is the natural person or persons who ultimately own, control or influence a client and/or persons on whose   behalf a transaction is  being   It also incorporates those   persons who   exercise ultimate effective control over a legal person or arrangement.
  2. Verify the client’s identity using reliable, independent source documents, data or information;
  3. Identify beneficial ownership and   control, i.e. determine which   individual(s) ultimately own(s) or control(s) the client and/or the person on whose behalf a transaction is being conducted;
  4. Verify the  identity of the  beneficial  owner of the  client  and/or the  person on whose   behalf   a  transaction  is  being   conducted,  corroborating  the   information provided in relation to (c);
  5. Understand the ownership and control structure of the client;
  6. Conduct ongoing due  diligence and  scrutiny, i.e. Perform ongoing scrutiny of the transactions  and   account throughout  the  course   of  the  business  relationship  to ensure that   the  transactions being   conducted  are  consistent  with   the  registered intermediary’s knowledge of  the  client,  its  business and  risk  profile,   taking   into account, where necessary, the client’s source  of funds;  and
  7. Registered intermediaries shall periodically update all documents, data or information of all clients and beneficial owners collected under the CDD process.

Reliance on third party for carrying out Client Due Diligence (CDD)   

  1. We should  rely   on  a  third  party  for  the   purpose  of  (a)  identification  and verification of the  identity of a client  and  (b) determination of whether the  client  is acting  on  behalf  of a  beneficial  owner, identification of the  beneficial  owner and verification  of  the   identity  of  the   beneficial     Such   third  party  shall   be regulated, supervised or monitored for, and  have  measures in place  for compliance with  CDD  and  record-keeping requirements in line  with  the  obligations under the PML Act.
  2. Such reliance shall  be subject  to the  conditions that  are specified in Rule 9 (2) of the  PML  Rules  and   shall  be  in  accordance  with   the  regulations  and   circulars/ guidelines issued by SEBI from time to time. Further, it is clarified  that the registered intermediary shall  be  ultimately responsible for  CDD  and  undertaking enhanced due diligence measures, as applicable.

(B) Client Identification Procedure

To have  a mechanism in place  to establish identity of the client  along  firm proof  of address  to   prevent  opening  of  any   account  which   is  fictitious  / benami  / anonymous in nature.

There are following documents/activities upon which  we can rely:-

  1. PAN Card : PAN Card  is mandatory and is most reliable  We can independently check its genuineness through Income  Tax website.
  2. Identity Proof : PAN Card,  itself can serve  as proof  of identity . However, in case PAN  card  carries  an old photograph of the holder, which  does  not match  current facial features of the client, we should take other  identity proof  in form  of Voter’s identity card,  Passport, Ration  Card  or any Government/PSU/Bank issued photo identity card.
  3. Address Proof : For  valid  address proof  we  can  rely  on  voter’s identity card, Passport, Bank  Statement, ration  card  and  latest  Electricity/telephone bill in the name  of the client.
  4. In person Verification:- In person Verification of the client to be done as per Rule, Guidelines etc.
  5. Monitoring of Trading  activities:-RMS department  should monitor the  trading activity  of the client and  exercise due  diligence to ensure that the trading activities of the client  is not disproportionate to the financial status and  the track  record of the client.
  6. Acceptance of Payment:-It  should be  insured that  payment  received from  the client is being  received in time and  through the bank  account the details  of which are  given   by  the   client   in  KYC  application  form   and   the  payment  through cash/bearer demand draft  should not be entertained.

Documents to be  obtained as  part   of  customer identification procedure  for  new clients:

  1. In case of individual, one copy of the following documents has to be obtained:

PAN  Card,  it is mandatory, it can  be verified its genuineness with  Income Tax website and  cross  verify  the  PAN  card  copy  with  the  original. “verified with  original”  stamp should be taken  as proof  of verification. Other  proofs for identity are voter’s identity card, Passport, Ration  Card  or any Government/PSU/bank issued photo identity card  or any  other  documents prescribed by the regulatory authorities.

Address proof  in the form of voter’s identity card,  Passport, Bank Statement, Ration  Card  and  latest  Electricity/telephone bill in the name  of the client  or any other  document prescribed by the regulatory authorities.

  1. In case  of  corporate, one  certified copy  of  the  following documents  must   be obtained:-

Copy of the Registration/Incorporation Certificate;

Copy of the Memorandum & Articles of the Association;

Copy of the latest audited Annual Statement of the corporate client;

Latest Income  Tax return filed with Income  Tax deptt.;

Latest Net worth Certification;

Copy of the PAN card and the Director index No.(DIN);

Board   Resolution  for  appointment  of  the   Authorized  Person   who   will operate the account;

Proof of address and any identity of Authorized Person

  1. In case of partnership firm one certified copy of the following must be obtained:-

Partnership Deed;

Registration certificate;

Authorization  letter   for  the  person authorized  to  open   and   operate the     account

Annual statement/returns of the partnership firm

PAN card of partners;

Proof of identity and address of the authorized person.

  1. In case of a Trust, one certified copy of the following must be obtained:-

Trust Deed;

Registration certificate;

Officially   valid   documents  like   PAN   card,   voters   ID,  Passport,  etc  of

person(s) authorized to transact on behalf of the trust;

PAN card;     Authorization letter for the entity  authorized to act on their behalf.

  1. In case of unincorporated association or a body of individuals, one certified copy

of the following must  be obtained:

Officially valid  documents like PAN Card,  Voters ID, passport, etc of the person(s) authorized to transact;

POA in favour person authorized to transact;

Resolution of the managing body  of such association or body  of individuals;

Any document required to establish the legal existence of such an association or body  of individual.

  1. In case of an NRI account- Repatriable/non-repatriable, the following documents

are required:

Copy of the passport;

Copy of the PIS permission issued by the bank;

Copy of the bank statement copy of the demat statement;

Copy of PAN card;

Proof of overseas address and  Indian address;

If the account is handled through a mandate holder, copy of the valid  POA/mandate.

Further, as per amendments to the Prevention of Money laundering (Maintenance of Records) Rules, 2005, it is stated as below:-

“Provided that in case of officially valid document furnished by the client does not contain updated address, the following documents shall be deemed to be officially valid documents for the limited purpose of proof of address:-

  • utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
  • property or Municipal tax receipt;
  • pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;
  • letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation; Provided further that the client shall submit updated officially valid document with current address within a period of three months of submitting the above documents.”

(C) Client for Special  Category (CSC)

Clients of special category (CSC) include the following- i. Non resident clients’  ii. High net-worth clients,

  • Trust, Charities, Non-Governmental Organizations (NGOs) and organizations receiving donations
  1. Companies having close family shareholdings or beneficial ownership
  2. Politically Exposed Persons (PEP) are individuals who are or have  been entrusted with  prominent public  functions in  a  foreign  country, e.g.,  Heads of States  or  of Governments,   senior    politicians,   senior    government/judicial/military   officers, senior  executives of state-owned corporations, important political  party officials, etc. The additional norms applicable to PEP as contained in the  subsequent para  5 of this  circular shall  also  be  applied to  the  accounts of the  family  members or  close relatives of PEPs.
  3. Companies offering foreign exchange offerings vii. Clients in high  risk countries where existence  / effectiveness of money laundering controls is suspect, where there is unusual banking secrecy, countries active in narcotics production, countries where corruption  (as  per   Transparency  International  Corruption  Perception  Index)   is highly    prevalent,  countries  against  which   government  sanctions  are   applied, countries reputed to  be any  of the  following – Havens/ sponsors of international terrorism, offshore   financial centers,   tax  havens, countries where fraud is  highly prevalent. While dealing with  clients  in high  risk countries where the existence/effectiveness   of   money  laundering   control    is   suspect, intermediaries apart from  being  guided by the  Financial Action  Task  Force (FATF) statements  that   identify  countries that   do  not  or  insufficiently apply  the  FATF Recommendations, published by the FATF on its website (www.fatforg),  shall also independently access and consider other  publicly available information.
  • Non face to face clients
  1. Clients with dubious reputation as per public information available etc. The above   mentioned list is only illustrative and   the intermediary shall exercise independent judgment to ascertain whether any other set of clients shall be classified as CSC or not.

(D) Policy for acceptance of clients

The following safeguards are to be followed while accepting the clients:-

No account is opened in a fictitious / benami name or on an anonymous basis. To ensure this we must insist the client to fill up all the necessary details in the KYC form in our presence and obtain all the necessary documentary evidence in support of the information filled in KYC. We identify the client whether he is debarred entity or not?

We must verify all the documents submitted in support of information filled in the KYC form with the originals and in-person verification should be done by our own staff.  Moreover new client should either be introduced by an existing customer or by the senior official of the company.

In  case  we   have   any   doubt  that   in-complete  / fictitious  information  is submitted by the client, we must  ask for such  additional information so as to satisfy ourselves about  the genuineness of the clients.

We should not continue to do business with such a person and file a suspicious activity report. We should also evaluate whether there is suspicious trading in  the  account and  whether there  is a need  to  freeze  or close the account.

We  should be  careful  while  accepting clients  of special  category like  NRIs, HNIs,  Trust,  Charities, NGOs,  Politically Exposed Persons (PEP), persons of foreign     origin,     companies   having    closed     share holding/ownership, companies dealing in foreign  currency, overseas in high  risk  countries, non face to face clients,  clients  with  dubious background. Current/Former senior high profile politician, Companies offering foreign exchange, etc.) or clients from high-risk countries or  clients  belonging to  countries where corruption/fraud level  is high.  Scrutinize minutely the records/documents pertaining to clients belonging to aforesaid category.

Do not compromise on  submission of mandatory information / documents. Client’s account should be opened only on receipt of mandatory information along with authentic supporting documents as per the regulatory guidelines. Do not  open  the  accounts where the  client  refuses  to provide information / documents and  we  should have  sufficient to  reject  the  client  towards this reluctance.

(E)  Risk based Approach

It  is  recognized that   certain   clients   may  be  of  a  higher or  lower   risk  category depending on  the  circumstances such  as the  client’s background, type  of business relationship or  transaction etc.  As such, the registered intermediaries shall apply each of the client due diligence measures on a risk sensitive basis. The basic principle enshrined in  this  approach is  that   the  registered  intermediaries  shall  adopt  an enhanced  client   due    diligence  process  for   higher  risk   categories  of   clients. Conversely, a simplified client due diligence process may be adopted for lower risk categories of clients.  In line  with  the  risk-based approach, the  type  and  amount of identification information and  documents that  registered intermediaries shall obtain necessarily depend  on  the  risk  category of  a  particular client.  Further, low risk provisions shall not apply when there   are suspicions of ML/FT or when other factors give rise to a belief that the customer does not in fact pose a low risk.

Risk Assessment

We shall  carry  out  risk assessment to identify, assess  and  take effective  measures to mitigate its money laundering and  terrorist financing risk with  respect to its clients, countries  or   geographical  areas,   nature  and   volume  of  transactions,  payment methods used  by  clients,  etc. The  risk  assessment shall  also  take  into  account any country specific information that  is circulated by the Government of India  and  SEBI from  time  to time,  as well  as, the  updated list of individuals and  entities who  are subjected  to  sanction  measures  as  required  under  the  various  United  Nations’ Security         Council         Resolutions                http://www.un.org/sc/committees/ 1267/aq_sanctions_list.shtml    and     http://www.un.org/sc/     committees/1988/ list.html).

The  risk  assessment carried out  shall  consider all  the  relevant risk  factors  before determining the level of overall  risk and  the appropriate level and  type  of mitigation to  be  applied. The  assessment shall  be  documented, updated regularly and  made available to competent authorities and self-regulating bodies,  as and  when required

Factors of risk perception of the client 

Factors of Risk Perception having regard to  Client`s Location ( Registered / Correspondence/ other address)

Particulars – Risk Perception

  • Face to Face clients of Agra  – Low Risk
  • Face to Face clients of other than Agra – Low Risk
  • Client Introduced by existing Face to Face – Clients Low Risk
  • Client Introduced by other Existing Clients – Medium Risk
  • Direct Clients of Agra – Medium Risk
  • Direct Clients of other than Agra – High Risk
  • Non- resident Clients – High Risk

Nature of Business Activity, Trading Turnover etc.

-Retail clients (average daily turnover < Rs 1 Crore) – Low Risk

  • Retail clients (average daily turnover > Rs. 1 Crore & < Rs.2 Crore – Medium Risk
  • HNI Clients (average daily turnover > Rs. 2 Crore – High Risk

Manner of Making Payment

  • Regular payment  through  A/c  payee  cheque  from  the  Bank  A/c already mapped with us – Low Risk
  • Payment through A/c payee cheque from the Bank A/c other than one already mapped with us – Medium Risk
  • Payment through Banker`s Cheque / Demand Draft / Cash – High Risk
  • Client of Special Categories – Very High Risk

(C) Suspicious Transaction identification and reporting

Suspicious Transactions

Suspicious transaction means a transaction whether or not made in cash, which  to a person acting  in good  faith  gives  rise to a reasonable ground of suspicious that  it may  involve the proceeds  of  crime;   or  appears  to  be  made  in  circumstance  of  unusual  or  unjustified complexity; or appear to have no economic rationale or bona fide purpose.

  1. A) Reasons for Suspicious:

Identity of client

Non-face to face client;

False identification documents;

Clients  in high-risk jurisdiction;

Accounts opened with names very close to other  established business entities;

Identification documents which  could  not be verified within reasonable time;

Receipt back of welcome kit undelivered at the address given  by the client;     Doubt over the real beneficiary of the account;     Suspicious background or links with  criminals.

Multiple Accounts

Unexplained transfers between such  multiple accounts Activity  in Accounts;

Large   number  of  accounts  having  a  common  parameters  as  common  partners  / directors / promoters / address / email  address / telephone numbers introducer or authorized signatory;

Use others different accounts by clients alternatively;

Activity inconsistent with what  be expected from declared business;     Unusual activity  compared to past transactions;     Sudden activity  in dormant accounts.

Nature of Transactions

Source of funds is doubtful;

Unusual or unjustified complexity;

Appears to be case of insider trading;

No economic rationale or bonafied purpose;

Transactions reflect likely market manipulation;

Suspicious off market transaction;

Purchases made on  own  account transferred  to  a  third party through an  off market      transaction through DP account.

Value of Transaction

Value just under the  reporting threshold amount  in  an  apparent  attempt to  avoid reporting;

Inconsistent with the clients apparent financial standing;

Inconsistency in the payment pattern by client;

Block   deal    which    is   not   at   market   price    or   prices    appear  to   be   artificially inflated/deflated;

Large sums  being transferred from overseas for making payments.

Identifying and Reporting  suspicious transaction

The  Principle Officer  for  any  suspicious transaction  will  transaction  filtered out  of  the following filters  in detail.  As the Business  dynamics are very  varied and  complex, defining transaction types  for reporting will not be undertaken at this juncture. Having said  that,  the Principal Officer  will review all the  transactions thrown out  by the filters  and  decides on a case-to case basis to report to FIU with  in stipulated time with complete details.

These  filters  will  be reviewed regularly for any  updations and  modifications to make  the system more robust and effective.

  1. Payment for payout to all the clients will be only through cheque. No cash payments to be entertained under any circumstances.
  2. All third party cheques to the credit of clients accounts irrespective of the amount.
  3. All payment  made either   by  way   of  Demand Draft/Cheque/Money  Transfer/Funds Transfer in  foreign   currencies  irrespective  of  the  In  case  of  DD  it  should be accompanied by the letter of bank in case of some unavoidable situation.
  4. To discourage the manipulation relating to the strength, we have started the provision of updating the financial statements of the clients annually and this is the ongoing procedure.

What to Report

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

The date on which  the transaction was conducted;

The nature of the transactions;     The parties to the transaction;     The reason of suspicion.

Retention of records

Records pertaining to active clients and staff details collected for recruitment shall be kept safely.  Further company has a policy to retain all records relating to  PMLA provision for at least  a period of 5 years.  We have also retained the statutory and regulatory compliance relating records and co-operate with law enforcement authorities with timely  disclosure of information.

Intermediaries shall  take  appropriate steps  to  evolve  an  internal  mechanism for proper maintenance and  preservation of such  records and  information in a manner that allows  easy and  quick retrieval of data  as and  when requested by the competent authorities. Further, the  records mentioned  in  Rule  3  of  PML  Rules  have  to  be maintained and  preserved for  a period of ten  years  from  the  date  of transactions between the client and  intermediary.

As stated in sub-section 5.5, intermediaries are required to formulate and  implement the  CIP containing the  requirements as laid  down in Rule  9 of the  PML Rules  and such   other   additional  requirements  that   it  considers  appropriate.  The   records evidencing the identity of its clients and beneficial owners as well as account files and business correspondence shall be maintained and preserved for a period of five years after the business relationship between a client and intermediary has ended or the account has been closed, whichever is later.”

Thus the following document retention terms shall be observed: –

  • All necessary records on transactions, both domestic and  international,  shall   be maintained  at   least   for   the  minimum  period prescribed under the  relevant Act and  Rules  (PMLA  and  rules  framed thereunder   as  well  SEBI Act)    and    other legislations,  Regulations  or  exchange bye-laws or circulars.
  • Records on  client  identification (e.g. copies  or records of official   identification documents like  passports, identity cards,  driving  licenses  or  similar  documents), account files and business correspondence shall also be kept for the same period.

In  situations where the  records relate  to  on-going investigations  or  transactions which  have  been  the  subject  of a   suspicious transaction reporting, they  shall  be retained until  it is confirmed that the case has been closed.

List of Designated Individuals/Entities

An  updated list  of individuals and  entities which  are  subject  to  various sanction measures such  as  freezing of assets/accounts, denial   of financial services  etc.,  as approved  by  the     Security   Council   Committee established pursuant  to  various United Nations’ Security    Council  Resolutions (UNSCRs)  can   be     accessed   at  its website at http://www.un.org/sc/committees/1267/consolist.shtml. Registered intermediaries are directed to ensure that accounts are not opened in the name of anyone whose    name    appears in said list. Registered intermediaries   shall continuously scan all existing accounts to ensure that no account is held by or linked to  any  of the  entities or  individuals included in  the  list.  Full details   of accounts bearing   resemblance with    any    of   the   individuals/entities   in   the   list   shall immediately be intimated to SEBI and FIU-IND.

Procedure for freezing of funds, financial assets  or economic resources  or relatedservices

As  per  section   51A,  of  the  Unlawful  Activities (Prevention)  Act,  1967  (UAPA), relating to  the  purpose of  prevention of,  and   for  coping   with  terrorist activities was  brought into  effect  through UAPA  Amendment Act,  2008. In this  regard, the Central  Government  has  issued  an  Order dated  August 27,  2009  detailing  the procedure for the implementation of Section 51A of the UAPA.    Under the aforementioned Section,  the  Central Government  is empowered to freeze,  seize  or attach  funds and  other  financial assets  or economic  resources  held   by,  on   behalf of,  or  at  the   direction  of  the individuals or entities listed  in the Schedule to  the Order, or any other  person  engaged in  or  suspected to  be  engaged in  terrorism. The Government is also further empowered to prohibit any individual or entity  from making  any   funds,  financial  assets   or   economic  resources  or   related  services available for the  benefit  of the  individuals or entities listed  in the  Schedule to the Order or any other  person engaged in or suspected to be engaged in terrorism.  The obligations to be followed by intermediaries to ensure the effective  and  expeditious implementation of   said  Order has  been    issued   vide    SEBI   Circular   ref.    no: ISD/AML/CIR-2/2009    dated October  23, 2009, which  needs  to be complied with scrupulously.

Information to be maintained

Company will maintain and   preserve the following information in respect of transactions referred to in Rule 3 of PMLA Rules for the period of 10 years.

  1. Contract Note;
  2. Client Registration Forms;
  • Nature of the transactions;
  1. Date on which the transaction was conducted;
  2. Amount of the transaction and the currency in which it denominated; VI. Parties to the transaction.

Monitoring of transactions

We have initiated to regular monitoring of transactions for ensuring effectiveness of the AML procedures. In  this  respect  we  have   an  understanding  of  the  normal activity  of the client so that it can identify deviations in transactions / activities.

We shall pay special attention to all complex, unusually large transactions / patterns which appear to have no economic purpose. The intermediary may  specify  internal threshold  limits   for  each   class  of  client   accounts  and   pay   special   attention  to transactions which   exceeds   these  limits.  The background including all documents/office records /memorandums/clarifications sought pertaining to such transactions and purpose thereof shall also be examined carefully and findings shall be recorded in writing. Further such  findings, records and  related documents shall be  made available to  auditors and   also  to  SEBI/stock  exchanges/FIUIND/other relevant  Authorities, during  audit,  inspection or  as  and   when  required.  These records are required to be preserved for ten years as is required under the PMLA.

We shall ensure a record of the transactions is preserved and  maintained in terms  of

Section  12 of the  PMLA  and  that  transactions of a suspicious nature or  any  other transactions notified under Section  12 of the  Act are  reported to the  Director, FIU- IND. Suspicious transactions shall   also   be   regularly reported to the higher authorities within the intermediary.

Further, the compliance cell of the intermediary shall randomly examine a selection of transactions undertaken by clients to comment on their nature i.e. whether they are in the nature of suspicious transactions or not.

Hiring of Employees

We  shall  have  adequate screening procedures in  place  to  ensure high  standards when hiring employees, having regard to the risk of money laundering and  terrorist financing and  the  size  of the  business, we  ensure that  all the  employees taking  up such key positions are suitable and  competent to perform their duties. The Company HR  is  instructed  to  cross   check   all  the   references  and   should  take   adequate safeguards to establish the authenticity and  genuineness of the persons before recruiting. The department obtains the adequate documents for verification thereof.

Record Keeping

We shall  ensure compliance with  the record keeping requirements contained in the SEBI Act,  1992, Rules  and  Regulations made  there-under, PMLA  as well  as  other relevant legislation, Rules,  Regulations, Exchange Bye-laws  and  Circulars. We shall maintain such records as are sufficient to permit reconstruction of individual transactions (including the amounts and types of currencies involved, if any) so as to provide, if necessary, evidence for prosecution of criminal behavior.

We Shall there be any suspected drug related or other laundered money or terrorist property, the competent investigating authorities would need to trace through the audit trail for reconstructing a financial profile of the suspect account. To enable  this reconstruction, registered intermediaries shall  retain  the  following information for the  accounts of their  clients  in  order to  maintain a satisfactory audit trail:  (a) the beneficial  owner of the  account;  (b) the  volume of the  funds flowing through the account;  and (c) for selected  transactions:-

  • the origin of the funds;
  • the form  in  which  the  funds were  offered  or  withdrawn, e.g.  cheques, demand drafts
  • the identity of the person undertaking the transaction;
  • the destination of the funds;
  • the form of instruction and authority.

We shall ensure that all client and transaction records and information are available on a timely basis to the competent investigating authorities. Where required by the investigating authority, they shall retain certain records, e.g.  client  identification, account files,  and  business correspondence, for  periods which   may  exceed  those required under the  SEBI Act,  Rules  and  Regulations framed  there-under  PMLA, other  relevant legislations, Rules and  Regulations or Exchange bye-laws or circulars.

6.5 More specifically, all the intermediaries shall put  in place a system  of maintaining proper record of transactions prescribed under Rule  3 of PML Rules  as mentioned below:-

  • all cash transactions of the value of more  than  rupees ten lakh or its equivalent in foreign  currency;
  • all series of cash transactions integrally connected to each other which  have  been valued below  rupees ten lakh or its equivalent in foreign  currency where such series of transactions have  taken  place  within a month and  the  aggregate value  of such transactions exceeds  rupees ten lakh;
  • all cash transactions where forged or counterfeit currency notes  or bank  notes have  been  used  as genuine and  where any  forgery of a valuable security has  taken place;
  • all suspicious transactions whether or not made in  and  by way  of as mentioned in the Rules.

Employees’ Training

Company adopted an ongoing employee training program so that the members of the staff are adequately trained in AML procedures. Training requirements have specific    focuses    for   frontline   staff,   back   office   staff,   compliance   staff,   risk management staff and staff dealing with new customers. It is crucial  that  all those concerned fully  understand the  rationale behind these  guidelines, obligations and requirements, implement them  consistently and  are  sensitive to  the  risks  of their systems being  misused by unscrupulous elements. The said training programme is being conducted through personal meeting/presentation.

Investors  Education

Implementation of AML measures requires back office and trading staff to demand certain information from investors which may be of personal nature or which have hitherto never been called for. Such information can include documents evidencing source of funds/income tax returns/bank records etc. This  can  sometimes lead  to raising of  questions by  the  customer with  regard to  the  motive and  purpose of collecting such information. There is, therefore, a need  for the back office and trading staff  to  sensitize their  customers about  these  requirements as the  ones  emanating from  AML  framework. The back office and trading staff should prepare specific literature/ pamphlets etc. so as to educate the customer of the objectives of the AML programme.

Reporting  to FIU

In terms of the PMLA rules, Intermediaries are required to report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit- India (FIU-IND)

  1. Cash Transaction Reports: The Prevention of Money-laundering Act, 2002, and rule there under require every intermediary, to furnish to FIU-IND information relating to:

All cash transactions of the value of more than rupees ten lakhs or its equivalent in foreign currency;

All series of cash transactions integrally connected to each other which have been valued below rupees ten lakhs or its equivalent in foreign currency where such series of transactions have taken place within a month;

The cash transaction report (CTR) (wherever applicable) for each month should be submitted to FIU-IND by 15th of the succeeding month.

All are requested not to accept cash from the clients whether against obligations or as margin for purchase of commodities or otherwise. All payments shall be received from the clients strictly by account payee crossed cheques drawn in favour of Raghunandan Capital Private Limited.

  1. Suspicious Transaction Reports:

All are requested to analyze and furnish details of suspicious transactions, whether or not made in cash. It should be ensured that there is no undue delay in analysis and arriving at a conclusion.

The intermediary shall furnish to FIU-IND information of all suspicious transactions whether or not made in cash.

The Principal Officer should record his reasons for treating any transaction or a series of transactions as suspicious. It should be ensured that there is no undue delay in arriving at such a conclusion. The Principal Officer will be responsible for timely submission of CTR and STR to FIU-IND concerning also the Red flags as indicated by FIU for generation of alerts and identification of suspicious transaction. Utmost confidentiality should be maintained in filing of CTR and STR to FIU-IND. The reports may be transmitted by speed/registered post/e-mail/fax at the notified address.

  • Counterfeit Currency Reports:

All cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine or where any forgery of a valuable security or a document has taken place facilitating the transactions may reported in Counterfeit Currency Reports (CCR).

Prevention of Money Laundering (Maintenance of Records) Rules, 2005 

Prevention of Money Laundering (Maintenance of Records) Rules, 2005 has been amended as per the gazette notification dated June 1, 2017:-

  1. Where the client has not submitted Aadhaar number at the time of commencement of account based relationship with the reporting entity, as per the PMLA requirement, then he/ it shall submit the same within 6 months of commencement of account based relationship with the reporting entity.
  2. Similarly, where the client is already having an account based relationship with reporting entities, prior to the date of notification, and have not submitted Aadhaar number, as per the PMLA requirement, to the reporting entity, then he/ it shall submit the same by December 31, 2017
  3. In case of failure to submit the documents within the aforesaid time limit, the account shall cease to be operational till the time Aadhaar number is submitted by the client.

Review of policy

The   aforesaid AML   policy   is   reviewed periodically to   meet   the   compliance requirements of PMLA 2002. The principal officer is the authority to give directions to concern for addition, changes, modifications etc. as directed by SEBI/FIU-IND.

Above said policies are reviewed by us on regular basis to keep it updated as per the various amendments in the PMLA rules.

In case any further information /clarification is required in this regard, the Principal Office may be contacted as follows :-

Mr. Rahil Uddin

Address: 26/257 B, Near Ashish Palace,

SultanGanj, Agra – 282004

Tel : 0562-4266600 | Fax : 0562-2526550

Email: askus@rmoneyindia.com

For Raghunandan Capital Private Limited 

Sd/- Director




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