📋 STR / CTR Reporting Policy

1. Purpose & Scope

This Standard Operating Procedure (SOP) establishes the framework for identifying, investigating, documenting, and reporting suspicious transactions (STR) and cash transactions (CTR) to the Financial Intelligence Unit — India (FIU-IND) as mandated under the Prevention of Money Laundering Act, 2002 (PMLA) and the PML (Maintenance of Records) Rules, 2005.

This policy applies to all employees, officers, and compliance staff of Vinance Coin who are involved in transaction monitoring, customer due diligence, or compliance functions.

2. Regulatory Framework

• Prevention of Money Laundering Act, 2002 (PMLA) — Sections 12 & 12A
• PML (Maintenance of Records) Rules, 2005 — Rules 3, 7, 8
• FIU-IND Guidelines — Reporting formats and FINnet 2.0 platform
• RBI Master Direction on KYC (2016) — Para 38-42 on Suspicious Transaction Reporting
• FATF Recommendations — Recommendation 20 (STR) and Recommendation 23 (CTR)
• MeitY Notification (March 2023) — Virtual Digital Asset Service Providers compliance

3. Key Definitions

4. Suspicious Transaction Report (STR)

4.1 When to File an STR

An STR must be filed when there is reasonable ground to believe that a transaction:

• Involves proceeds of crime or is related to money laundering
• Is designed to evade reporting requirements (structuring/smurfing)
• Has no apparent lawful purpose and is inconsistent with the customer's profile
• May involve financing of terrorism or proliferation of weapons
• Involves transactions to/from sanctioned entities, countries, or individuals
• Shows patterns consistent with layering, integration, or placement of illicit funds

4.2 Red Flags Triggering STR Investigation

4.3 STR Filing Timeline

4.4 STR Filing Process

1. Detection: Transaction monitoring system flags suspicious activity or compliance officer identifies manually
2. Investigation: Compliance analyst conducts enhanced review — gathers transaction history, KYC documents, IP logs, device fingerprints
3. Report Preparation: Draft STR is prepared in the internal system with full details — subject info, transaction details, suspicion description, red flags, amount involved, and supporting evidence
4. MLRO Review: The Money Laundering Reporting Officer reviews the draft for completeness and accuracy
5. Dual Approval: A second designated officer reviews and approves the report (4-eyes principle)
6. FIU-IND Filing: Report is filed electronically via FINnet 2.0 in the prescribed XML format
7. Acknowledgement: FIU-IND acknowledgement reference is recorded in the system
8. Record Keeping: All STR records, supporting documents, and audit trails are retained for minimum 5 years from the date of filing

5. Cash Transaction Report (CTR)

5.1 CTR Threshold

A CTR must be filed for:

• Any single cash transaction exceeding ₹10,00,000 (₹10 Lakhs)
• A series of connected cash transactions in a calendar month totalling ₹10,00,000 or more
• Any integrally connected cash transactions below the threshold that appear to be structured to avoid reporting

5.2 CTR Filing Timeline

5.3 CTR Process

1. Automatic Detection: System automatically flags all transactions exceeding ₹10L threshold and tracks cumulative monthly totals per customer
2. Consolidation: At month-end, all CTR-triggering transactions are consolidated per customer
3. Report Generation: CTR reports are auto-generated with transaction details, customer information, and total amounts
4. Review & Approval: MLRO reviews and approves the consolidated CTR
5. Filing: CTR is filed via FINnet 2.0 by the 15th of the succeeding month

6. Report Lifecycle & Workflow

7. Tipping Off Prohibition

To prevent tipping off:

• All STR-related communications are restricted to authorized compliance personnel only
• Internal systems enforce access controls — only designated officers can view STR status
• Customer-facing staff are not informed about specific STR filings
• Account actions (freeze, block) are communicated as "routine compliance review" without referencing STR
• Training programs emphasize the criminal consequences of tipping off

8. Record Keeping & Data Retention

All STR/CTR records must be maintained for the following retention periods as per PMLA and PML Rules:

9. Internal Controls & Governance

9.1 Dual Approval (4-Eyes Principle)

All STR filings require approval from at least two designated officers before submission to FIU-IND. This ensures accuracy, reduces individual bias, and provides additional oversight.

9.2 Segregation of Duties

• Detection: Automated monitoring system + Front-line staff
• Investigation: Compliance Analyst
• Review: MLRO (Money Laundering Reporting Officer)
• Approval: Second designated officer / Compliance Head
• Filing: Authorized filing officer with FINnet 2.0 credentials

9.3 Quality Assurance

• Monthly review of all filed STRs/CTRs for accuracy and completeness
• Quarterly analysis of detection effectiveness and false positive rates
• Annual independent audit of the STR/CTR process by internal audit
• Regular benchmarking against FIU-IND feedback and typology reports

10. Penalties for Non-Compliance

11. Training & Awareness

• Induction Training: All new employees receive STR/CTR awareness training within 30 days of joining
• Annual Refresher: Mandatory annual training for all compliance staff on updated typologies and red flags
• Specialized Training: MLRO and designated officers undergo FIU-IND accredited training programs
• Scenario Exercises: Quarterly tabletop exercises simulating STR detection, investigation, and filing
• FIU-IND Typologies: Team reviews latest FIU-IND typology reports and case studies

12. Contact Information

Compliance Team:

• Email: compliance@vncexchange.com
• STR/CTR Queries: aml@vncexchange.com

FIU-IND (Regulatory Authority):

• Financial Intelligence Unit — India
• 6th Floor, Hotel Samrat, Chanakyapuri, New Delhi — 110021
• Website: fiuindia.gov.in
• FINnet 2.0 Portal: finnet2.fiu-india.gov.in