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Particulars
1. Money Laundering means
-a) Conversion of assets to invest in Laundromats
b) Conversion of money which is illegally obtained to make them legitimate
c) Conversion of cash into gold to make them legitimate d) Conversion of assets into cash to make them legitimate
2. The implementation of KYC in banks primarily addresses which one of the following risks:
a) Reputation risk b) Legal risk
c) Money laundering risk d) Compliance risk
e) Market risk
(KYC in banks is primarily designed to address money laundering and only its non-implementation can lead to compliance risk.)
3. When banks sell third party products (such as insurance, mutual funds etc) as agents, the responsibility for ensuring compliance with KYC/AML/CFT
regulations ……….
a) lies with the bank marketing the product b) lies with the third party issuer
c) lies with both the bank as well as the third party issuer
d) depends on whether the customer pays the money in cash or otherwise
e) depends on whether the customer is a walk-in customer
(RBI Circular No RBI/2013-14/135 DBOD.AML.BC.No.29 /14.01.001/2013-14 dated July 12, 2013)
4. Under the KYC guidelines, banks need to conduct EDD - ‘Enhanced due diligence’ in all the following cases except in case of ….
a) Correspondent accounts. b) Non-face-to-face customers. c) Firms with sleeping partners
d) Trustees, Nominees, and Fiduciaries.
e) Personal customers with small deposits. (Reference: Derived from IBA guidance note on KYC and AML)
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5. As per FIU guidelines, a bank has to mandatorily maintain records in case of suspicious transactions for a period of ……years from the date of cessation of the transactions between the client and the banking
a) Three b) Five c) Seven d) Ten e) Twelve
(FIU Website and circulars issued by FIU)
6. As per FIU guidelines the records of all information on identity of clients are required to be maintained by every reporting entity for a period of ….. year (s) from the date of cessation of the relationship with their clients.
a) One b) Two c) Three d) Five e) Ten
(FIU guidelines as detailed on their website)
7. One of the following is not required to be reported to FIU. a) Accounts opened report (AOR)
b) Cash transaction report (CTR) c) Counterfeit currency report (CCR) d) Suspicious transaction report (STR)
e) Cross border wire transfer report (CBWTR) (FIU guidelines given on FIU India website)
8. The Government of India has notified six documents as ‘Officially Valid Documents (OVDs) for the purpose of producing proof of identity. Choose the correct option from the following.
a) Aadhaar Card, Passport, PAN Card, Employee ID, Voter Identity Card, Ration Card
b) PAN Card, Aadhaar Card, Driving Licence, Voter Identity Card, Ration Card, Passport,
c) Voter Identity Card, Passport, PAN Card, Aadhaar Card, Employee Id, NREGA Job Card
d) Passport, PAN Card, Aadhaar Card, Driving Licence, Voter Identity Card, NREGA Job Card
e) Employee ID, Passport, PAN Card, Driving Licence, Photo passbook of Bank / PO, Aadhaar Card,
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9. Banks in India can outsource …… a) KYC
b) Marketing c) Control function d) Corporate planning e) Decision making function
(Barring ‘Marketing’ all others are core functions and cannot be outsourced as per RBI guidelines)
10. As per KYC norms, branches should monitor
a) cash deposits 10 lakhs and above in deposit accounts b) cash payment of 10 lakhs and above in deposit accounts
c) cash receipt/cash payment Rs. 10 lakhs or above in deposits accounts including CC/OD
d) Only cash deposit in Savings account for Rs 10 lakhs and above 11. The cut-off limit of Rs. 10 lacs and above for aggregate cash deposits for
reporting to FIU is a) Per day b) Per month c) Per quarter d) Per half-year e) Per year
12. For KYC norms customer means
a) a person or entity that maintains an account or business relationship b) one on whose behalf the account is maintained
c) beneficiaries of transactions conducted by professional intermediaries such as stock brokers/Chartered accountants etc
d) any person or entity with financial transaction which can pose
significant reputation or other risks to the bank[a wire transfer or issue of high value DD]
e) From the above a) to c) f) From the above a) to d)
13. In an account is classified as high risk, the fresh KYC documents are be obtained after …… years
a) 10 years b) 8 years c) 3 years d) 2 years
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14. As per KYC guidelines, which one of the following customers is having high risk?
a) Central Govt. employee b) State Govt. employee c) Bank employee d) Small business man
e) Politically exposed person resident abroad.
15. In which of the following cases it is not necessary to identify and verify the beneficial owners as per the KYC Norms of RBI where–
a) The client is a partnership firm
b) The client is an unincorporated association
c) The client is an unincorporated body of individuals d) The client is a trust
e) The client is a company listed on a stock exchange
16. The risk of money laundering or terrorist financing is lower in ………. a) Private banking
b) Non-resident customers c) Cash intensive business d) Basic banking account
e) Company having nominee shareholders (Reference: Derived from RBI Circular on KYC and AML)
17. FATF is an inter-governmental body of G7 group of countries, a policy making body which sets standards to combat money laundering and financing of terrorism. FATF stands for …….
a) Fight against terrorist financing b) Financial association task force c) Financial action on terrorist financing d) Financial action task force
e) Financial action task field
(Reference: RBI / IBA guidelines on KYC and AML)
18. Branches should not open deposit/advances accounts of banned/ terrorist organisations as circulated by
-a) IRDA b) SEBI c) AMFI d) FIU
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19. Is India a member of FATF? a) Yes
b) No
c) Has applied for inclusion d) Is likely to be made a member
20. Unusual activities in respect of an customers account is/are -a) Opening of account at a place other than the place of work
b) Frequent deposits of large sums of money bearing labels of other banks into the account
c) Request for closure of newly opened accounts where high value transactions are routed through
