KYC AND AML POLICY

ATHISYA FOUNDATION
A Section 8 Non-Profit Company registered under the Companies Act, 2013
CIN: U88100TN2025NPL185597 | NGO Darpan ID: TN/2025/0861653
Registered Office: Thuvarankurichi, Manapparai, Tiruchirappalli – 621314, Tamil Nadu

KNOW YOUR CUSTOMER (KYC) & ANTI-MONEY LAUNDERING (AML) POLICY

1. Preamble

Athisya Foundation is committed to conducting its charitable activities

with the highest standards of financial hygiene, transparency, integrity, and legal

compliance. This Policy establishes an institutional framework for verifying the identity of

donors, beneficiaries, vendors, and implementation partners, and for preventing the

Foundations accounts, platforms, and operations from being misused for money

laundering, terror financing, or any unlawful channel.

2. Legal Framework & Regulatory Citations

This Policy is formulated and enforced under the statutory authority of applicable Indian

laws and international benchmarks, as amended from time to time:

 The Companies Act, 2013: Section 8 provisions and related corporate governance rules

enforced by the Ministry of Corporate Affairs (MCA).

 The Prevention of Money-Laundering Act, 2002 (PMLA): And the Prevention of Money-

Laundering (Maintenance of Records) Rules, 2005, incorporating the PMLA 2023

Amendment Rules.

 The Income Tax Act, 1961: Sections 12A/12AB, 80G, 2(15), 269ST (cash transaction

limits), 115BBC (anonymous donations), and Form 10BD (mandatory annual donation

reporting).

 The Foreign Contribution (Regulation) Act, 2010 (FCRA): And rules administered by the

Ministry of Home Affairs (MHA).

 NITI Aayog DARPAN Portal: Institutional registration and compliance guidelines.

 FIU-IND Guidelines: Guidelines issued by the Financial Intelligence Unit – India for

Reporting Entities (REs).

 International Benchmarks: RBI Master Direction on KYC and FATF Recommendation 8

on Non-Profit Organization (NPO) sector risk mitigation.

3. Objectives

 Identity Verification: Establish the true identity of donors, corporate CSR partners,

vendors, and grant beneficiaries prior to entering into any financial transaction or

agreement.

 Illicit Fund Mitigation: Prevent the Foundation from being utilized, knowingly or

unknowingly, as a conduit for money laundering, tax evasion, terror financing, or

anonymous cash routing.

 Statutory Compliance: Ensure strict adherence to donation limits, tax reporting via

Form 10BD for 80G tax receipts, and statutory filings required by the MCA, Income Tax

Department, and FIU-IND.

 Audit Trail Maintenance: Maintain an immutable, legally auditable paper trail for all

receipts, disbursements, and governance decisions.

4. Scope

This Policy applies universally to:

 All incoming funds (individual donations, corporate CSR grants, institutional funding,

and government grants).

 All disbursements (vendor payments, implementation partners, and direct beneficiary

welfare/relief disbursements).

 All members of the Board of Directors, Principal Officer, administrative officers, staff,

and volunteers handling financial operations.

5. Risk-Based Categorisation (RBA)

The Foundation applies a Risk-Based Approach to categorize transactions and donors:

Foreign Contributions

6. Donor Due Diligence (DDD) & KYC Documentation

A. Individual Donors

 Mandatory Identification: Permanent Account Number (PAN) is mandatory for all

donations seeking tax deduction under Section 80G.

 Officially Valid Documents (OVDs): Address/identity proof (Voter ID, Passport, or

Driving Licence) for contributions above statutory reporting thresholds.

 Form 10BD Mapping: Donor identity details (Name, Address, PAN) are directly

uploaded to the Income Tax Department portal to enable verifiable 80G tax receipts.

B. Corporate & CSR Donors

 Certificate of Incorporation (CoI) and Corporate PAN Card.

 Memorandum  Articles of Association (MoA & AoA).

 Board Resolution authorizing the CSR grant and delegating authorized signatories.

 Proof of CSR-1 Registration with the Ministry of Corporate Affairs.

 Ultimate Beneficial Ownership (UBO): In accordance with the 2023 PMLA Amendment

Rules, corporate entities must disclose natural persons who ultimately hold controlling

ownership interest (exceeding 10% in companies or 15% in partnerships/trusts).

C. Vendors and Implementation Partners

 Entity PAN and GST Registration Certificate (where applicable).

 Bank account verification (cancelled cheque or official bank statement matching the

registered entity name).

 Onboarding screening against statutory debarment and government blacklists.

7. Cash Handling & Transaction Restrictions

 Strict Limit: No cash donation of ₹2,00,000 or more is accepted from any single source

in a single day, strictly enforcing Section 269ST of the Income Tax Act, 1961.

 Cash Deprecation: Cash transactions are actively discouraged in favor of transparent

digital payment rails (NEFT, RTGS, IMPS, UPI, Cheque, or Demand Draft).

 Banking Turnaround: Any small cash contribution received at project sites must be

issued an official receipt and deposited into the Foundation’s designated corporate bank

account within two (2) working days.

 Prohibition of Anonymous Cash: Anonymous donations are prohibited in compliance

with Section 115BBC of the Income Tax Act.

8. Foreign Contributions (FCRA Isolation)

The Foundation does not currently hold FCRA registration under the Foreign Contribution

(Regulation) Act, 2010.

 The Foundation does not accept, directly or indirectly, any contribution, grant, or

remittance from a foreign source (including foreign citizens, foreign companies, or

foreign trusts).

 All donation entry points automatically screen card origins and non-resident bank

transfers.

 Acceptance of foreign contributions will remain strictly suspended until formal FCRA

registration is granted by the Ministry of Home Affairs (MHA), at which point funds will

route exclusively through the designated FCRA account at the State Bank of India (SBI),

Main Branch, New Delhi.

9. Appointment of Principal Officer & FIU-IND Compliance

In compliance with Chapter IV of the Prevention of Money-Laundering Act, 2002 (PMLA):

 Designated Principal Officer: The Board of Directors has appointed a management-level

executive as the Principal Officer for AML/CFT compliance.

 Reporting Entity Status: Athisya Foundation is registered as a recognized Reporting

Entity (RE) on the FINnet Gateway portal of the Financial Intelligence Unit - India (FIU-

IND), Ministry of Finance.

 Duties of the Principal Officer:

1. Supervise internal KYC protocols and staff training across all operational wings.

2. Maintain continuous oversight over donor transaction monitoring.

3. File mandatory statutory returns, including Suspicious Transaction Reports (STRs),

Cash Transaction Reports (CTRs), and Non-Profit Organisation Transaction Reports

(NTRs) directly with FIU-IND via FINnet.

 Designated Director: The Board has assigned a Designated Director to ensure overall

regulatory accountability and board-level oversight under PMLA mandates.

10. Monitoring, Red Flags & Suspicious Transaction Reporting

All financial transactions are continuously monitored. A transaction will be flagged as

suspicious and escalated to the Principal Officer upon encountering any of the following Red Flags

1. 1. Structuring / Smurfing: Multiple smaller deposits made within a short period to

intentionally evade donor identification thresholds.

2. 2. Identity Reluctance: A donor refusing or stalling the submission of mandatory PAN or

identity documents.

3. 3. Third-Party Diversions: A donor requesting that their contribution be quickly

refunded or rerouted to an unrelated third-party bank account.

4. 4. Unexplained Source: Sudden, disproportionately massive inflows from unknown

entities lacking verifiable operational histories.

Where suspicion is substantiated, the Principal Officer will file an STR with FIU-IND within

the statutory timeframe without alerting the donor (anti-tipping-off obligation).

11. Record Retention and Auditing

 Retention Mandate: In compliance with PMLA Rules and MCA regulations, all donor KYC

records, bank statements, transaction logs, project procurement invoices, and

correspondence will be retained securely for a minimum of eight (8) years from the end

of the relevant financial year.

 Audit Accessibility: All retained documentation shall be made available for inspection

upon lawful request by Statutory Auditors, the Registrar of Companies (ROC), Income

Tax Authorities, or law enforcement agencies.

12. Governance & Policy Review

This Policy was officially reviewed and adopted by the Board of Directors of Athisya

Foundation. The Board, alongside the Principal Officer, shall review this policy at least once

per financial year—or immediately following any material statutory amendment—to

ensure continuous regulatory alignment.