KYC Question

8/3/2019 KYC Question

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1. How many Key Elements of KYC Policy of Banks are present?

a. Two

b. Fourc. Sixd. Eight

2. Which of the following information should be gathered by banks to understand the nature of the business of the

Correspondent Bank?a. Major Business Activities

b. Level of AML/KYC compliancec. Purpose of opening the accountd. All of the above

3. Corresponding Banks should refuse to enter into a correspondent relationship with a Shell bank

a. True

b. Fals e

4. The objectives of the KYC guidelines is to allow the bank from being used by criminal elements for moneylaundering activities

a. Trueb. False

5. KYC meansa. Know Your Customers wellb. Know Your existing customersc. know your prospective customersd. Satisfy yourselves about the customers identity and activities

6. Sec 131 of NI act, 1881 extends protection toa. Paying Bankerb. Collecting bankerc. Advising Bankerd. Issuing Banker

7. Change of Risk category under KYC can be considered in not less than __ years in case of low risk customers

and not less than __ years in case of medium / high risk customers.a. 2,2b. 5,5c. 5,2d. 2,5

8. Under KYC, which of the following documents can be accepted as a documents of proof name, address andactivity of proprietary concern

a. Sales tax registration certificateb. Service tax registration certificatec. Professional tax registration certificated. Any of these

9. What is the cut-off point amount of a cash transaction, under KYC that requires to be reported:a. Up to Rs 10 lakhsb. Rs 10 Lakhc. Above Rs 10 lakhd. Rs 20 laks and above

10. KYC guidelines have been issued by RBI under provisions of:a. Section 21 of BR Actb. Section 35 of BR Actc. Section 35 A of RBI Actd. None of the above


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11. CTR- monthly reporting to FIU-IND by the Corporate office with in ________Days.a. 10b. 15c. 20d. Month end

12. Which one of the following best explains the term "Shell Bank"?a. A Bank, which is incorporated in a country where it has no physical presence.b. A bank which is incorporated to take deposits only and invests in 100% secured Govt securities only.

These banks normally charge huge service charges from their depositors to earn profits. These types ofbanks are normally in Switezerland & other small European countries.

c. A bank which is having 100% of its branches in a country in which it has been incorporated i.e. no foreign

branch.d. A bank incorporated in Islamic country on the, principles of Islamic Banking.

e. None of the above.

13. A Pakistani national of Indian origin wishes to open NRI account: What decision you would take?a. Decline his request because he is not considered a NRIb. Open the account because he is not a resident of Indiac. Collect his necessary documents and seek RBI's permissiond. Seek head office approval

14. In case of receipt of Counterfeit currency Note from a customer the action of the bank should be____?

a. To tear the Note in small pieces

b. To impound the Note & issue receipt to the customer duly signed by Manager, Cashier & customer

c. To impound the Note & issue receipt to the customer duly signed by Cashier & customer onlyd. To hand over the customer to the police.e. None of the above.

15. As per RBI Anti-Money laundering guidelines, the Ordering Bank and Intermediary Bank in case of Wire Transfers

have to preserve the originating information for at least _____years:a. 10b. 5c. 21

d. 12

16. Financial Intelligence Unit (FIU) is maintained by _______:a. RBIb. CBIc. Each bank's HOd. Ministry of Finance

17. Which one of the following is not correct with regard to quoting of PAN number for banking transactions?

a. Opening of an account with banking company in cashb. Single time deposit receipt exceeding Rs 50000/- with a bank in cash,c. On application for issue of DD/MT etc for cash, if amount is Rs 50000 or more.d. For making deposit under Tax Saver Scheme, irrespective of the amount.

e. None of the above.18. Failure of internal process is categorized under which type of Risk?a. Internal Riskb. Operational Riskc. Process Riskd. Credit Risk

e. Normal Banking-Risk

19. A saving bank account is treated as a dormant account if there is no operation in it for the last...years:

a. One


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b. Twoc. Threed. 6 monthsAnswer: (A)

20. Under KYC guidelines, what is the amount up to which the bank drafts or cash orders can be issued by the banks

for cash?a. Rs.20000b. 30000

c. 50000d. 75000

21. For the purpose of KYC policy of RBI, who among the following cannot be considered a Customer?

a. a person or entity that maintains an account and/or has a business relationship with the bank;b. one on whose behalf the account is maintained (i.e. the beneficial owner);

c. beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers, Chartered

Accountants, Solicitors etc. as permitted under the law,d. none of the above

22. Preservation of bank records is mandatory under which of the following Acts?a. RBI Act 1934b. Preservation of Books Act 1902

c. Indian Evidence Actd. Banking Regulation Act 1949

23. A private limited company ABC Pvt Ltd wants to open a current account with your branch. Which of the following

are not required to be obtained from the company:a. Memorandum & Articles of Associationb. Resolution of Board of Directors & Certificate of incorporationc. Certificate of Incorporationd. Introduction as required under KYC guidelinesAnswer: (C)

24. Ravi your customer of a saving bank account is approached by a person called Ram to give an introduction to

enable him to open a saving bank account with your branch to which he agrees. Subsequently it is proved that

Ravi gave introduction though he really did not know much about Ram. In such situation:a. Bank can hold Ravi responsible as he carelessly gave the introduction

b. Bank cannot hold Ravi responsible as Ravi has not violated introduction rulesc. Bank can recover 50% of amount from Ravid. any of the abovee. None of the aboveAns (b)

25. Which of the following documents in case of a company, is called Charter of the company:a. Resolution from Board of Directors or Shareholdersb. Memorandum of Associationc. Articles of Associationd. Certificate of Incorporation

e. Certificate of Commencement of BusinessAns (b)

26. A company has been formed to undertake the business of software development. This objective of the company

would be found in which of the following documents:a. Certificate of Incorporationb. Certificate of Commencement of Businessc. Resolution from Board of Directorsd. Articles of Associatione. None of the above


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27. You are approached by a person for opening an account in the name of an executor of a will. You require which of

the following documents:a. Registration certificateb. Memorandum of association and articles of association,c. Probated. letter of administratione. None of the above.

28. Which of the following is not correct with regard to prevention of Money Laundering provisions:a. it is acquiring, owning, possessing or transferring any proceeds of money of crime

b. it is a process of converting money obtained illegally to appear to have originated legitimate sources

c. India has passed the Prevention of Money Laundering Act to identify and control the transactions of

money launderingd. Records relating to money laundering transactions are to be preserved by banks for 20 yearse. Offences under money laundering are cognizable and non-bailable.

29. 81 In deposit accounts, the photographs are obtained. Why?

a. to avoid fraudsb. to avoid irregularitiesc. to detect irregularities in financial transactionsd. to comply with UN directives

e. to check benami accounts / transactions

30. Under Know Your Customer guidelines of RBI, for which period the records are required to be maintained:

a. 1 yearsb. 2 yearsc. 4 yearsd. 5 yearse. 10 years

31. What is the time period prescribed by RBI for preservation of records under Prevention of Money Laundering and

what is the time period during which suspicious transaction report is to be sent within, days of detection:a. 2 years, 15 daysb. 4 years, 12 days

c. 5 years, 10 daysd. 10 years, 7 daye. 12 years, 7 days

32. KYC record to be maintained for transactions of :a. Rs.10 lac only in cashb. Rs.10 lac only in cash or transferc. more than Rs.10 lac in cash or transfer onlyd. Rs.10 lac or above in cash

33. Know Your Customer (KYC) guidelines have been issued to check anti-money laundering activities. The

guidelines have been issued by _______under__________.a. RBI: Sec 35 (a) of RBI act

b. RBI: Sec 35(a) of Banking Regulation Actc. IBA: Sec 35(a) of Banking Regulation Actd. GOI Under Anti Money Laundering Acte. None of the above.

34. A report of transactions of Rs 10 lacs and above is submitted to higher office. The periodicity of the report is:

a. Weeklyb. Fortnightlyc. Monthlyd. Quarterly


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e. None of the above.

35. RBI has simplified KYC procedure for opening accounts for those persons who intend to keep balances not

exceeding Rs.____________ in all their accounts taken together and total credit in all the accounts taken togetheris not expected to exceed Rs. ___________lac in a year.

a. 50,000, 1,00,000b. 1,00,000, 5,00,000c. 5Iac,10Iacd. 5 lac, 151ac

36. In duly introduced account, the account holder has committed fraud. What is the liability of introducer?a. Introducer has to pay the amount to the bank.

b. Liability of introducer is co-terminus with. that of the account holder. FIR will also be lodged against him.

c. Introducer establishes identity of the customer only. If the identity is OK, he is not liable to the

loss occurred to the bank.

d. Introducer establishes identity of the customer to the best of his knowledge. If his intentions are not

fraudulent and the customer turns out to be fictitious person, the introducer can not be held liablee. None of the above.

37. KYC guidelines have been issued by whom and under which act?RBI under Section 35 A of BR act.

38. For non-compliance of KYC Bank may attract penalties under which Act?BR Act.

39. Under KYC guidelines the account of introducer should be atleast how many month old?Six months old

40. Under KYC guidelines reporting / monitoring is compulsory for the transaction of Rs?

10 lakhs and above

41. Customer is defined under which act?KYC norms

42. What is the document required to opened the a/c of joint stock co.

MOA, Cert. of incorporation, Board Resolution

43. What is the man objective of KYC norms?To ensure banking channels are not used to convert illegal funds into legal funds

44. Transaction in a newly operated accounts are to be kept under close watch at least for a period of?

3 months

45. KYC guidelines take into account the recommendations of an International Financial Action Task Force (FATF) a)

on anti money laundering standards b) on combating financing of terrorism c) on manipulation of Economicindicators

a. a and b onlyb. b and c only

c. a and c onlyd. a to c all

46. Demand Draft can be issued against payment in cash for an amount up to:a. Rs 1 lacb. Rs 50000 onlyc. Less than Rs 50000d. Rs 20000 only

47. KYC guidelines have been issued by RBI with the objective of:


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a. Stopping occurring of frauds in banksb. Prevent use of banks for unaccounted for money

c. Prevent use of banks for money laundering processes

d. To have control over money laundering

48. The USA PATRIOT Act was passed in:a. 1970b. 1985c. 2001

d. 2007

49. The three stages of money laundering are:a. Layering, Placement, Refiningb. Placement, Refining, Integrationc. Refining. Integration, Layeringd. Integration, Layering, Placement

50. In determining what risks a customer poses, which consideration should NOT be a major factor?

a. Where the customer resides or where the business is headquartered.b. What is the size of your financial institution.c. What occupation or type of business does the customer derive their income from.d. What are the customers ethnic heritage, sexual orientation and political beliefs.

51. A number of recommendations have been made by whom?a. Financial Action Task Fieldb. Financial Aging Terror Fundc. Financial Action Task Force

d. Financial Laundering Task Force

52. Under FATF guidelines companies have a duty of care called what?

a. Know Your Customerb. Monitor Customers manuallyc. Customer Due Cared. Customer Due Diligence

53. If I see something that looks suspicious what should I do?

a. Say nothing and hope that it will go awayb. Inform your Supervisor or Managerc. Inform the MLRO immediatelyd. Contact the Police

54. What does PEP stand for?a. Potential Ex - Convicted Personb. Politically Engaged Personc. Politically Exposed Persond. Poorly Explained Potential

55. Risk arising from failure of computer system and loss of data is:a. credit risk

b. system riskc. liquidity riskd. operational riske. computer risk


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Documents

KYC Question