List some parameters for enhanced due diligence
The parameters for enhanced due diligence is: Customer location, financial status, Nature of
business or Purpose of transaction
What is meant by KYC Policy
All banks need to have a KYC policy as mandated by RBI, in India. The KYC policy lists Customer
Acceptance Policy, Customer Identification Procedures, Monitoring of Transactions and Risk
Management.
Describe the Customer Acceptance Policy in AML/KYC
The customer acceptance policy is guidelines to be followed for account opening by the
customer. The policy enlists documents needed for identity and other mandated customer
characteristic.
Explain the customer identification procedure in AML/KYC
The customer identification procedure is the process of identifying the customer by documents
and available information so as to be compliant to AML/KYC laws as mandated by Government.
Who can be regarded as a customer for the purpose of KYC?
A customer is: individual or a company which maintains an account, establishes relationship, or
on whose behalf account is maintained or beneficiary of accounts maintained by
intermediaries.
What Banking Regulations Act, 1949 contains?
It contains AML/KYC Guidelines.
CTR stands for?
Cash transaction report as per PMLA.Also referred as currency transaction report
What is a KYC Policy?
With reference to RBI guidelines issued vide all banks are required to formulate a KYC Policy
with the approval of their respective boards. The KYC Policy consists of following key elements -
1. Customer Acceptance Policy 2. Customer Identification Procedures
3. Monitoring of Transactions 4. Risk Management.
What do you understand by Customer Identification Procedure?
Customer Identification refers to identifying the customer and verifying identity through
reliable and independent documents, data and information. In which case the banks would
need to satisfy to the competent authorities that due diligence was observed in accordance
with the requirements of existing laws and regulations.
What is PMLA Act
The PMLA Act expands to The Prevention of Money Laundering Act (PMLA) and is the anti-
money laundering act of Government of India passed in 2002.
What do you understand by PEP in AML/KYC
PEP expands to Politically Exposed Persons and refers to individuals who are prominent and
hold public or political positions who are susceptible to corruption.
Which international organization is mandated to bring global cooperation against terrorist
financing and money laundering
FATF or the Financial Action Task Force aims for global cooperation against terrorist financing
and money laundering
What is CTR in AML-KYC
CTR expands to cash transaction reports and it is a report listing all cash transactions of more
than Rs. 10 lakh. The report is submitted to FIU in India.
Explain STR in AML-KYC
STR refers to suspicious transaction report, lists suspicion or unusual transaction and lists why
the transaction is so.
What is KYC remediation in banking?
KYC remediation is the process of updating customer documents and information collected
through KYC to meet regulatory compliance. Institutions must comply with regulations under
AML / CTF. If rules are not followed, they may be exposed to severe ML / TF risks and suffer
reputational damage.
Negative News
It is a key mechanism for identifying adverse news (including exposure to sanctions) about a
customer or connected parties.
Screening for negative news is done through HSBC approved tools ex world check.
Transaction monitoring is the process of monitoring a customer's transactions such as transfers,
deposits and withdrawals. A transaction monitoring system will seek to identify suspicious
behaviour which could indicate money laundering or other financial crime occurring.
