Know Your Customer (KYC) and Customer Acceptance Policy

1. INTRODUCTION

This Know Your Customer (KYC) and Customer Acceptance Policy ("Policy") has been formulated and adopted by PROSPER PROFESSIONAL DEVELOPMENT LIFE PRIVATE LIMITED ("PROSPER", "Company", "We", "Us", or "Our"), a technology-enabled B2B financial services company incorporated under the Companies Act, 2013, providing digital payment services, financial inclusion services, banking correspondent services, merchant solutions, and various value-added financial products through its network of authorized agents, distributors, merchants, and business partners across India.

The purpose of this Policy is to establish a robust framework for customer identification, verification, due diligence, acceptance, monitoring, risk assessment, and compliance management in accordance with applicable laws and regulatory requirements.

PROSPER recognizes that effective KYC procedures and customer acceptance standards are fundamental to preventing money laundering, terrorist financing, identity theft, fraud, financial crimes, and misuse of financial systems. Accordingly, this Policy establishes the principles and procedures governing customer onboarding, verification, and ongoing monitoring.

This Policy has been developed in compliance with applicable laws, regulations, and guidelines, including but not limited to:

• Prevention of Money Laundering Act, 2002 (PMLA);
• Prevention of Money Laundering Rules, 2005;
• Reserve Bank of India (RBI) Master Direction on Know Your Customer (KYC), as amended;
• Payment and Settlement Systems Act, 2007;
• Digital Personal Data Protection Act, 2023;
• Information Technology Act, 2000;
• FIU-IND Guidelines;
• NPCI Operational Guidelines;
• Aadhaar Act, 2016;
• UIDAI Authentication Regulations;
• RBI Payment Aggregator Guidelines;
• RBI Digital Lending Guidelines;
• FATF Recommendations;
• Other applicable laws and regulations.

2. OBJECTIVES OF THE POLICY

The objectives of this Policy are:

• To establish comprehensive customer identification procedures;
• To prevent money laundering and terrorist financing;
• To ensure compliance with regulatory obligations;
• To verify the identity of customers;
• To assess customer risk profiles;
• To prevent fraud and impersonation;
• To protect the integrity of financial systems;
• To maintain transparency and accountability;
• To facilitate financial inclusion while ensuring compliance;
• To establish ongoing customer due diligence procedures.

3. SCOPE OF THE POLICY

This Policy applies to all customers, merchants, agents, distributors, retailers, business correspondents, and entities utilizing services facilitated through PROSPER, including but not limited to:

• BBPS Services;
• AEPS Services;
• Micro ATM Services;
• Merchant Services;
• UPI Services;
• Domestic Money Transfer Services;
• Prepaid Card Services;
• Business Correspondent Services;
• Account Opening Services;
• Loan Facilitation Services;
• Insurance Facilitation Services;
• Financial Inclusion Services;
• Other digital financial services.

4. DEFINITIONS

5. CUSTOMER ACCEPTANCE POLICY

PROSPER shall establish business relationships only after conducting appropriate due diligence.

The Customer Acceptance Policy shall ensure that:

• No anonymous accounts are opened;
• No fictitious names are accepted;
• Customer identity is properly verified;
• Customer risk is appropriately assessed;
• Regulatory requirements are complied with;
• Financial crimes are prevented.

PROSPER reserves the right to accept, reject, suspend, or terminate customer relationships based on risk assessment and compliance requirements.

6. CUSTOMER IDENTIFICATION PROGRAM (CIP)

Before establishing a business relationship, PROSPER shall obtain and verify the following information:

7. OFFICIAL VALID DOCUMENTS (OVDs)

PROSPER may accept any of the following Officially Valid Documents:

• Aadhaar Card;
• Passport;
• Driving License;
• Voter ID Card;
• NREGA Job Card;
• National Population Register Letter;
• PAN Card;
• Other government-approved documents.

8. KYC METHODS

PROSPER may perform KYC using one or more of the following methods:

9. CUSTOMER DUE DILIGENCE (CDD)

PROSPER shall conduct due diligence before onboarding customers.

CDD shall include:

• Identity verification;
• Address verification;
• Mobile verification;
• Email verification;
• PAN validation;
• Bank account validation;
• Beneficial ownership verification;
• AML screening;
• Fraud checks.

10. ENHANCED DUE DILIGENCE (EDD)

Enhanced Due Diligence shall apply to:

• Politically Exposed Persons (PEPs);
• Non-resident customers;
• High-value customers;
• High-risk businesses;
• Trusts and NGOs;
• Cash-intensive businesses;
• Customers from high-risk jurisdictions.

EDD may include:

• Additional documentation;
• Source of funds verification;
• Source of wealth verification;
• Senior management approval;
• Enhanced monitoring.

11. CUSTOMER RISK CATEGORIZATION

Customers shall be categorized as:

12. AML/CFT SCREENING

PROSPER shall perform:

• Sanctions screening;
• PEP screening;
• Adverse media screening;
• Terrorist watchlist screening;
• Fraud database checks;
• Regulatory blacklist checks.

Suspicious customers may be rejected or reported.

13. BENEFICIAL OWNERSHIP IDENTIFICATION

For non-individual entities, PROSPER shall identify and verify beneficial owners in accordance with applicable laws.

Information collected may include:

• Name;
• PAN;
• Address;
• Ownership percentage;
• Identification documents.

14. ONGOING DUE DILIGENCE

PROSPER shall conduct ongoing monitoring of:

• Customer transactions;
• Account activities;
• Transaction patterns;
• Risk profiles;
• Suspicious activities.

Periodic KYC updates may be required.

15. RE-KYC AND PERIODIC UPDATION

Customer KYC records shall be periodically updated:

PROSPER may request additional information whenever necessary.

16. REJECTION OF CUSTOMER APPLICATIONS

PROSPER may reject customer onboarding where:

• Identity cannot be verified;
• False information is provided;
• Documents are forged;
• AML concerns exist;
• Regulatory restrictions apply;
• Suspicious activities are detected.

17. RECORD RETENTION

PROSPER shall maintain:

• KYC records;
• Transaction records;
• Due diligence records;
• Audit logs;
• Customer communications.

Records shall be retained for at least:

• Five (5) years after closure of relationship;
• Or such period as required by law.

18. DATA PRIVACY AND SECURITY

PROSPER shall protect customer information using:

• AES-256 encryption;
• TLS 1.2+ encryption;
• Access controls;
• Multi-factor authentication;
• Audit trails;
• Security monitoring.

Customer data shall be processed in accordance with:

• DPDP Act, 2023;
• Information Technology Act, 2000;
• RBI Guidelines.

19. SUSPICIOUS TRANSACTION REPORTING

PROSPER may:

• Freeze transactions;
• Suspend accounts;
• Report suspicious activities;
• File STRs with FIU-IND;
• Cooperate with law enforcement agencies.

Customers shall cooperate with investigations.

20. GRIEVANCE REDRESSAL

21. LEGAL FRAMEWORK

This Policy is governed by:

• Prevention of Money Laundering Act, 2002;
• RBI Master Directions on KYC;
• Payment and Settlement Systems Act, 2007;
• Information Technology Act, 2000;
• Digital Personal Data Protection Act, 2023;
• Aadhaar Act, 2016;
• FIU-IND Guidelines;
• NPCI Regulations;
• Applicable Indian laws.

22. POLICY REVIEW

This Policy shall be reviewed:

• Annually;
• Upon regulatory changes;
• Upon introduction of new services;
• Upon identification of compliance risks.

23. EFFECTIVE DATE

This Policy shall come into force on 01 July 2026 and shall remain effective until amended or replaced.

24. DECLARATION

This KYC & Customer Acceptance Policy has been approved by the management of PROSPER PROFESSIONAL DEVELOPMENT LIFE PRIVATE LIMITED and shall be binding upon all employees, agents, distributors, merchants, business correspondents, and service partners.