FOUNDATION COURSE FDD- DEPOSIT/ KYC CASE STUDY NO. 1
FDD
NAME-LALJI HARIJAN STAFF NO-86948 DESIGNATION –PROB. OFFICER BRANCH-RASOOLPUR SADAT DELPHI ROLL NO-411/2013
Under KYC norms. norms. Which of these requirements requirements are taken care by CIM50 in FCR? QUESTION 1 A)Customer Identification B), Risk Categorization C) Transaction monitoring D) both a and b
Ans- D
QUESTION 2
As per KYC policy of RBI, which of the following instruments can be issued in cash if amount is Rs. 50000 50000 or above A) Travelers cheque, demand drafts B) Demand drafts, mail transfers C) Mail transfers, telegraphic transfers D) None
Ans-D
QUESTION 3
PAN is required to be quoted, as per RBIS’s KYC K YC guidelines if the amount of transaction in cash is: A) Above 50000 B) 50000 or above C) Less than 50000 D) 10000 n above
Ans- B QUESTION 4
Banks are to keep a close watch on large size size cash debit debit or credit transactions in deposit or loan accounts & keep a record of such transaction. For this purpose, the large size transaction means, where the amount is: A) 10 lakhs and above B) Above 10 lakhs C) Less than 10 lakhs D) All the above
Ans-A
QUESTION 5
KYC guidelines take into account the recommendation of an international Financial Action Task Force (a)on anti-money laundering standards (b) on combating financing of terrorism (c) on manipulation of economic economic offences: A) A and b B) B and c C) A and c D) All
Ans- A QUESTION 6
KYC policy of the banks, as per RBI directives should provide for a) customer acceptance policy b) customer identification procedure c) monitoring of transactions d) risk management A) A, b and c B) A, c and d C) B, c and d D) All
Ans- D QUESTION 7
For KYC policy, the customer has been defined to include a) a person or entity that maintains an account and/or has a business relationship with a bank b) one on whose behalf the account is maintained (i.e. the beneficiary owner) c) beneficiaries of transactions conducted by professional intermediaries, such as Stock brokers, CA, solicitors etc as permitted under law d) any person or entity connected with a financial transaction which can pose significant reputational or other risks to bank, say a wire transfer or issue of a high value demand draft as a single transaction A) B) C) D)
a, b and c A, c and d B, c and d all
Ans-D QUESTION 8
Under KYC guidelines, where a customer doesn’t comply with the KYC requirements, his account can be closed a) decision to close account should be taken at high level b) account should be closed after giving due notice to the customer c) account should be closed after explaining the reasons to customer: A) All a to c B) A and c C) A and b D) B and c
Ans-D QUESTION 9
Which of the following customer doesn’t fall under low risk category under KYC guidelines:
A) B) C) D)
Salaried employees Persons from lower strata Govt. deptt. Trusts
Ans-D QUESTION 10
Which of the following customer doesn’t fall under high risk category customers from KYC purposes a) politically exposed persons of foreign origin b) companies having close shareholding c) firms having sleeping partners d) hight net worth individuals. A) All a to d B) A to c C) B to d D) A, b and d only
Ans-A QUESTION 11
As per KYC guidelines, the banks cannot have correspondent arrangements with ‘shell banks’ Here shell banks means: A) Bank having no existence but on paper only B) Bank incorporated outside having branch in india C) Bank incorporated in a country where it has no existence & it is not regulated by a regulatory authority D) Bank incorporated outside india and banned by UNO to have operations other than in country of incorporation.
Ans-A QUESTION 12
As per prevention of money laundering act, the banks are required to maintain record of transactions for a period of __ from date of cessation of the transactions: A) 2yrs B) 5 yrs C) 10 yrs D) 20 yrs
Ans-C QUESTION 13
Which of the following is the document for proof of customer identity and address under KYC: A) Telephone bill B) Aadhar number C) Electricity bill D) All
Ans-B QUESTION 14
In case of high risk customers, Full KYC is required to be done by the bank: A) Not less than 5 yrs B) Not less than 3 yrs
C) Not less than 2 yrs D) Not less than 1 yrs
Ans-C QUESTION 15
Risk category review under KYC has to be undertaken by banks: A) Not less than once in 2 yrs B) Once in 1 yr C) Not less than once in 6 months D) Not less than once in 3 months
Ans-C QUESTION 16
In case of low risk customers, full KYC is required to be done by banks: A) Not less than 2 yrs B) Not less than 5 yrs C) Not less than 10 yrs D) Not required
Ans-C QUESTION 17
Which of the following group of customers will be categorized as low risk customer, as per provisions of A) Govt. deptt, a joint stock company B) Partnership firm, a salaried employee C) Salaried employee, govt deptt. D) All
Ans-D QUESTION 18
KYC guidelines have been issued by RBI under provisions of…. A) Sec 42 of RBI ACT 1934 B) sec 35A of RBI ACT, 1934 C) sec 35A of banking regulation act, 1949 D) sec 24 of banking regulation act,1949 E) both a and c
Ans-C QUESTION 19
The main objective of KYC guidelines is to: A) prevent banks from being used by criminal elements for money laundering activities. B) Enable banks to know/understand their customers & their financial dealings better and thereby broaden their customer’s base. C) Combating financing of terrorism. D) All E) Only a and c
Ans-E QUESTION 20
As per KYC guidelines of RBI, banks should ensure that any remittance of funds by way of demand drafts, mail/telegraphic transfer or any
other mode and issue of traveler’s cheque for v alue of -----is affected by debit to the customers account or against cheques and not against cash payments. A) Rs25000 and above B) 50000 and above C) 1 lac and above D) Above Rs. 50000 E) Above Rs. 1 lacs
Ans-B QUESTION 21
Customer verification is vital to any KYC procedure. What is acceptable in verifying an individual customer? Select the incorrect response from the alternatives below. In verifying an individual customer, you can rely on: a) a certified copy of a birth certificate in conjunction with the customer’s drivers licence and Medicare card. b) Sighting original identification such as birth certificate and drivers licence. c) A reference from a good friend. d) ration card
Ans-C QUESTION 22
As per current KYC guidelines banks are required to maintained proper record of cash transactions of A) Deposit of Rs 10 lacs and above B) Withdrawal of Rs 10 lacs and above C) Deposits and withdrawals of Rs 10 lacs and above D) Deposit and withdrawl of over Rs 10 lacs E) Deposits and withdrawal of Rs 5 lacs and above
Ans-C QUESTION 23
As per relaxation in KYC guidelines, a person can open small account by furnishing only self attested photographs and address provided he undertakes that A) Balance in his account will not be more than 50000 at any time B) The total credits in a financial year will not be more than 1 lac C) The total transactions in a financial year should not exceed Rs 2 lacs D) Both a and c E) Both a and b
Ans-E QUESTION 24
KYC guidelines of RBI are not applicable to: A) Accounts of individuals held singly or jointly B) Accounts of corporate C) Correspondent bank accounts D) Only a and b E) None
Ans-C Question 25
Which of the following document(s) cannot be accepted as documentary evidence of proof of identity of an individual willing to open an account with the bank as per latest KYC guidelines of RBI? A) Driving licence B) PAN card C) Voter’s ID card D) Ration card E) Both a and d
Ans-D Question 26
Which of the following documents can be accepted as documentary evidence of correctness of permanent address of an individual willing to open an account with the bank as per the latest KYC guidelines of RBI? A) Passport B) Driving licence C) Aadhar card D) Voter’s ID card E) Any of the above
Ans-E QUESTION 27
Besides usual documents for opening accounts of a limited company, which other documents is/are in the list of documents prescribed by RBI in its KYC guidelines? A) An officially valid document in respect of managers, officers, employees holding an attorney to transact on its behalf B) Power of attorney granted to its managers, officers, or employees to transact business on its behalf C) Copy of PAN allotment letter/telephone bill D) Only a and b E) Only b and c
Ans-D QUESTION 28
What is C.A.P under KYC? A) Customer assurance policy B) Customer acceptance policy C) Consumer assurance policy D) Consumer acceptance policy
Ans-B Question 29
What is C.I.P under KYC? A) Customer identification procedure B) Customer investigation procedure C) Consumer insurance policy
D) Consumer investigation policy
Ans- A Question 30
Should the investor visit bank personally to obtain KYC Compliance? a) First time yes b) Subsequent updation may send documents through post c) Can send Documents self attested through some one d) All the above
Ans- D Question 31
To whom is a KYC applicable? a) Minor b) Power of attorney (POA) holder c) Joint holders d) All The above
Ans- D Question 32
Is there a charge I need to pay to get myself KYC Compliant? a) Rs. 100 b) Rs. 500 c) Rs. 1000 d) Free of cost
Ans- D Question 33
Are there any special requirements for an NRI? a) Yes. In addition to the certified true copy of the passport, certified true copy of the overseas address b) Yes. In addition to the certified true copy of the passport, certified true copy of the overseas address and permanent address will be required. c) No special requirements d) None of these
Ans-B Question 34
Is there any special requirement for a PIO (Person of Indian Origin)? a) Yes. In addition to the certified true copy of the passport, certified true copy of the overseas address b) Yes. In addition to the certified true copy of the passport, certified true copy of the overseas address and permanent address will be required. c) Yes, he will need to submit a certified true copy of the PIO Card.
d) Both b and c
Ans-D Question 35
Maximum balance amount (In all accounts) to be maintained by the customer, who are not in a position to submit documents for fulfilling KYC Norms : (a) Rs.50000 (b) Rs.75000 (c) Rs. 1 lac (d) Rs.1.5 lacs
Ans-A Question 36
Risk categorization under KYC is done by : (a) Customer (b) Branch (c) Zonal Offices (d) RBI
Ans-B Question 37
PAN is made compulsory only for : (a) Pension A/cs (b) All accounts (c) No Frills A/cs (d) Demat A/c
Ans-B Question 38
A power of attorney stands extinguished on : (a) Death of the principal (b) Death of the attorney (or agent) (c) Lunacy of the principal (d) All the above
Ans-D Question 39
What is KRA? a) Key result areas b) KYC’s remote areas c) KYC’s registration agency d) Key responsibility area
Ans-C Question 40
What kind of risks is mitigated by KYC? a) Reputational and operational b) Legal and concentration c) Financing and legal d) All
Ans-D Question 41
What are the major elements of KYC policy a) Customer acceptance and identification b) Customer assurance and investigation c) Customer verification and risk management d) Both a and b e) Both a and c
Ans-E Question 42
Which of the following should be treated as a ‘customer’ for prudent KYC analysis? a) Any person or company which can conduct a transaction in relation to an account offered by a bank. b) Any person who is a signatory to an account offered by a building society. c) Any person or company which holds an account issued by a credit union. d) All of the above.
Ans-D Question 43
Mr. Yadav is a politician raising funds for an upcoming election. He regularly banks at Indian national Bank and opens an account in which to place campaign contributions. The contributions are expected to reach about 61 million. Mr. Yadav’s private bankers at Indian National bank are aware of his profession and the purposes of the account. Since he is an old customer and has a solid reputation, they waive many of the checks to verify the funds. What money laundering risks, if any, does Indian national Bank face in this situation? Indian National Bank Faces: a) Reputational, operational, legal and concentration risk. b) Reputational and operational risk. c) Reputational, operational and legal risk. D) no risk bank is Getting business from Good Customer
Ans-C Question 44
What should you consider when managing AML/CTF in your business? This is known as: a) Knowing your customer b) Destination of funds c) Methods of delivery, such as cash, telephone and internet banking d) All the above
Ans-D Question 45
Please read the KYC practice stated below. Identify the KYC element which best relates to the stated practice. Well-developed and applied
customer assessments enable initial identification and classification of potentially high-risk customers. This is known as: a) customer acceptance b) customer identification c) accounts and transaction monitoring d) risk management
Ans-A Question 46
Please read the KYC practice given below. Identify the KYC element which best relates to the stated practice. High-risk customer activity is regularly reviewed and substantial high-risk customers are personally known to management. This is known as: a) customer acceptance b) customer identification c) accounts and transaction monitoring d) risk management
Ans-C Question 47
Please read the KYC practice given below. Identify the KYC element which best relates to the stated practice. Effective informationgathering strategies enable building of a solid information base about each customer. This is known as: a) customer acceptance b) customer identification c) accounts and transaction monitoring d) risk management
Ans-B Question 48
During customer acceptance and identification activities, on which of the following customers should enhanced due diligence be conducted? Select the incorrect response from the alternatives below. Enhanced due diligence should be conducted on: a) trustees, nominees, and fiduciaries. b) personal customers with small deposits. c) non-face-to-face customers. d) correspondent accounts.
Ans-B Question 49
A well-established and well-regarded customer of your bank refers a new customer to you. The new customer is a leasing company that does business in the Philippines. It is also listed on the Philippine Stock Exchange. What level of due diligence would be required? a) This situation requires a normal degree of due diligence. It is a public company and has been introduced by a trusted customer. b) This situation requires a very limited degree of due diligence
because the new customer is a public company and has been introduced by a trusted customer. c) This situation requires an enhanced degree of due diligence. The customer is a non-bank financial company based overseas. d) no special diligence required
Ans-C Question 50
A lawyer who banks with you is a sole practitioner. He wants to open a trust account for a client. He provides you with the trust documents and the name and address of the trust beneficiary but is unable to provide additional details due to a client confidentiality obligation. You notice that the address is from an overseas jurisdiction. What level of due diligence would be required? a) This situation does not require enhanced due diligence. You know the lawyer well and you have been provided with the trust documents and identity of the beneficiary. b) This situation requires enhanced due diligence because an offshore jurisdiction is involved. c) This situation requires enhanced due diligence because the lawyer is clearly hiding something when he says he is under a client confidentiality obligation. d) none of above
Ans-B
