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. Which of these 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
As per KYC policy of RBI, which of the following instruments can be
QUESTION 2 issued in cash if amount is Rs. 50000 or above
A) Travelers cheque, demand drafts
B) Demand drafts, mail transfers
C) Mail transfers, telegraphic transfers
D) None

Ans-D
PAN is required to be quoted, as per RBISs KYC guidelines if the
QUESTION 3 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 cash 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) a, b and c
B) A, c and d
C) B, c and d
D) all

Ans-D
QUESTION 8 Under KYC guidelines, where a customer doesnt 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 doesnt fall under low risk category
under KYC guidelines:
 A) Salaried employees
B) Persons from lower strata
C) Govt. deptt.
D) Trusts

Ans-D
QUESTION Which of the following customer doesnt fall under high risk category
10 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 As per prevention of money laundering act, the banks are required to
12 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 Which of the following is the document for proof of customer identity
13 and address under KYC:
A) Telephone bill
B) Aadhar number
C) Electricity bill
D) All

Ans-B
QUESTION In case of high risk customers, Full KYC is required to be done by the
14 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 Risk category review under KYC has to be undertaken by banks:
15 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 In case of low risk customers, full KYC is required to be done by banks:
16 A) Not less than 2 yrs
B) Not less than 5 yrs
C) Not less than 10 yrs
D) Not required

Ans-C
QUESTION Which of the following group of customers will be categorized as low
17 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 KYC guidelines have been issued by RBI under provisions of.
18 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 The main objective of KYC guidelines is to:
19 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 customers
base.
C) Combating financing of terrorism.
D) All
E) Only a and c

Ans-E
QUESTION As per KYC guidelines of RBI, banks should ensure that any remittance
20 of funds by way of demand drafts, mail/telegraphic transfer or any
 other mode and issue of travelers cheque for value 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
Customer verification is vital to any KYC procedure. What is
QUESTION acceptable in verifying an individual customer?
21 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
customers 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 As per current KYC guidelines banks are required to maintained proper
22 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 As per relaxation in KYC guidelines, a person can open small account
23 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 KYC guidelines of RBI are not applicable to:
24 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) Voters 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) Voters ID card
E) Any of the above

Ans-E
QUESTION Besides usual documents for opening accounts of a limited company,
27 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 What is C.A.P under KYC?
28 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) KYCs remote areas
c) KYCs 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. Yadavs 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 information-
gathering 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