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CS Professional · IFSCA - Regulations, Listing and Compliances · Banking Services and Finance Companies in IFSC

Dev Payments Ltd operates in GIFT IFSC and wants to provide a platform that onboards customers using digital KYC and holds customer funds for cross-border transfers. A director asks how its financial crime compliance obligations arise. Which view is correct?

The unit must follow IFSCA's AML/CFT and KYC requirements along with the Prevention of Money Laundering Act framework, including KYC, record keeping and suspicious transaction reporting. These duties apply to regulated entities beyond banks, and digital KYC only changes the onboarding method.

  1. AAML/CFT obligations apply only to banks, not to fintech units
  2. BObligations apply only after the unit's turnover exceeds a threshold
  3. CThe unit, as an IFSCA-regulated entity, must follow IFSCA's AML/CFT/KYC requirements and the Prevention of Money Laundering Act frameworkCorrect
  4. DDigital KYC exempts the unit from reporting suspicious transactions

Explanation

Regulated entities in the IFSC, including fintech service providers, must comply with IFSCA AML/CFT guidelines read with PMLA obligations such as KYC, record keeping and suspicious transaction reporting. Digital onboarding changes the method, not the duty, and obligations are not confined to banks.

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