AML-KYC
1. In the process of customer identification, the customer identification data should be updated __________ in 5 years in case of low risk category, and __________ in case of medium and high risk category customers.
1. Twice; 1 year
2. Once; 1 years
3. Twice; 2 years
4. Once; 2 years*
2. ____________ is the process of keeping the amount lower than that fixed for reporting and building similar transactions till the amount planned to be laundered is reached fully.
1. Entrailing
2. Lading
3. Slushing
4. Smurfing*
3.What information about the correspondent bank must be available
1. Major business activities
2. The bank's management
3. Level of AML/KYC compliance
4. All of the above*
4. Which of the following acts defines the offence of Money Laundering as under – “Engaging directly or indirectly in a transaction that involves property, that is proceeds of crime (or) derived from proceeds of crime (or) knowingly receiving, possessing, concealing, disguising, transpiring, converting, disposing off within the territories of India, removing form or bringing into the territory of India the property that is proceeds of crime”
1. Anti-Money Laundering Act, 2005
2. Active Money Laundering Act (AMLA), 2003
3. Prevention of Money Laundering Act (PMLA), 2002*
4. Impediment of Money Laundering Act (PMLA), 2002
5. Which of the following is a high risk activity?
1. A customer purchasing a car from a local garage
2. Printing a statement for a customer
3. A loan for home improvement
4. Money transfer to unknown third parties*
6. Please read the KYC practice given below. Identify the KYC element which best relates to the stated practice. Well-developed and applied customer assessments enable identification and classification of potentially high-risk customers. This is known as _____________.
1. customer acceptance*
2. customer identification
3. accounts and transaction monitoring
4. risk management
7. Which of the crime is not included under PMLA, 2002 for proceeds of crime
1. Drug trafficking
2. Kidnapping
3. Murder
4. None of the above*
8. Who file a report onward to the FIU-IND, if the Bank concludes that a transaction is suspicious
1. PO*
2. senior management
3. Internal Audit and Control team
4. None of the above
9. Laundering might attempt a series of small currency transaction over time because _____________.
1. a provision of the bank secrecy act requires the filing of CTR for a transaction exceeding Rs. 10 Lakhs*
2. Larger amount are too risky to carry around
3. that's the way in which launderers take in the funds
4. None of the above
10. The three stages of money laundering are ____________.
1. Layering, Placement, Refining
2. Placement, Refining, Integration
3. Refining. Integration, Layering
4. Integration, Layering, Placement*
11. What should awareness and training of staff on AML/KYC, should cover
1. need to know the true identity of the customer
2. need to know enough about the nature of business activities expected
3. to know what might constitute suspicious activity
4. All of the above*
12. Money laundering involves three independent steps that often occurs simultaneously. Which of the following best explains the layering in the process of money laundering?
1. Physically placing bulk cash proceeds
2. Separating the proceeds of criminal activity from their origin, through complex level of financial transactions*
3. Providing a legitimate explanation for the illicit proceeds
4. None of the above
13. What is not audited by Internal Audit and Control teams of the banks
1. adequacy of policies
2. adequacy of procedures
3. system support to detect suspicious and potential money laundering transaction
4. None of the above*
14. What should you consider when managing AML/CTF in your business?
1. Knowing your customer
2. Destination of funds
3. Methods of delivery such as cash, telephone and internet banking
4. All of the above*
15. When is induction training provided to employees
1. start of their employment*
2. end of their employment
3. Depends upon trainer availability
4. Depends upon training schedule
16. What services are offered by correspondent banks
1. International wire transfers
2. Cheque clearing
3. Cash/fund transfers
4. All of the above*
17. ____________ is a bank which is incorporated in a country where is no physical presence and is not affiliated to any regulated financial group.
1. Correspondent Bank
2. Shell Bank*
3. Respondent Bank
4. Compendium Bank
18. Which element of an effective transaction monitoring process, involves scrutiny of the transactions carried out by the customer over a longer period of time
1. Analysis of transactions*
2. Identification of Exceptional transactions
3. Enhanced Due Diligence
4. None of the above
19. Which of the following should be treated as a ‘customer’ for prudent KYC analysis?
1. any person or company which can conduct a transaction in relation to an account offered by a ban
2. any person who is a signatory to an account offered by a building society
3. any person or company which holds an account issued by a credit union
4. All of the above*
20. 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 ____________.
1. a certified copy of a birth certificate in conjunction with the customer's drivers licence and Medicare card
2. sighting original identification such as birth certificate and drivers licence
3. a reference from a good friend*
4. None of the above
21. ________________ services are used to buy or sell foreign currencies, to consolidate small denomination bank notes into larger ones, or to exchange financial instruments. Criminals are attracted to this method of laundering as they are not as heavily regulated as traditional financial institutions.
1. Remittance
2. Bureaux De Change*
3. Back-to-Back Loans
4. Collection Accounts
22. ________________ are fake companies that appear on paper, but may not physically exist.
1. Shell Companies*
2. Front Companies
3. Offshore Banking
4. Hawala Systems
23. During customer acceptance and identification activities, on which of the following customers should enhanced due diligence be conducted?
1. trustees, nominees, and fiduciaries
2. non-face-to-face customers
3. correspondent accounts
4. All of the above*
24. Which one of the following is a Valid document available to the bank for customer identification?
1. Election ID card*
2. Ration Card
3. Bank statement of account
4. Photograph
25. Which of the following terms is used to describe the process of sending money through multiple financial institutions to make it difficult to track?
1. Integration
2. Camouflage
3. Placement
4. Layering*
26. What should be recorded regarding records of employee training on AML/KYC
1. date of training
2. nature of the training received
3. attendance
4. All of the above*
27. Money derived from criminal activity is known as _______________.
1. Proceeds Possession
2. Proceeds of Crime*
3. Dirty Money
4. Crime Laundering
28. Money laundering is the result of crime and the persons behind the crimes appear to be using banking channels for the purpose of _______________. (I) fund transmission (II) creating a legal front of money raised through illegal and humanity demeaning methods.
1. Only (I) above
2. Only (II) above
3. Both (I) and (II) above*
4. None of the above
29. What should employees be aware about the handling of transactions which may involve money laundering
1. potential effect on the bank
2. potential effect on bank's employees
3. potential effect on bank's customers
4. All of the above*
30. Which of the following are required documents to establish both the identity and the correct address while opening accounts of companies? (I) Certificate of incorporation and Memorandum of Articles of Association (II) Resolution of Board of Directors to open an account, and identification of those who have the authority to operate the account (III) Power of Attorney granted to a partner or an employee of the firm to transact business on its behalf (IV) Copy of PAN allotment letter (V) Copy of telephone bill
1. (I), (II), (III) and (IV) above
2. (I), (II), (IV) and (V) above
3. (II), (III), (IV) and (V) above
4. (I), (II), (III), (IV) and (V) above*
31. _______________ is the provision of banking services by one bank to another bank.
1. Respondent Banking
2. Crude Banking
3. Correspondent Banking*
4. None of the above
32. While monitoring of customer transaction it should be ensured that there is no _________ i.e., manipulation of the size of transaction so that if seen individually they fall below the threshold that needs to be reported to the monitoring authority.
1. Entrailing
2. Structuring*
3. Lading
4. Slushing
33. AML/KYC guidelines are issued under ____________.
1. BR Act,1949
2. PMLA,2002
3. RBI Act
4. Both A and B above*
34. _____________ is a matrix of different components (such as source of funds, level of income, volume and frequency of transaction etc) that helps arrive at a benchmark transaction for individual customer transactions, against which a comparison can be made.
1. KYC Profile
2. Customer Risk Profile
3. Transaction Profile*
4. Interim Profile
35. 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 _____________.
1. customer acceptance
2. customer identification
3. accounts and transaction monitoring*
4. risk management
36. Money Laundering refers to ____________.
1. Conversion of cash in to gold
2. Conversation of assets into cash
3. Conversion of assets into cash
4. Conversion of money which is illegally obtained*
37. How does KYC checks be communicated to customers of bank
1. Incorporating the requirements in the account opening forms
2. Publishing relevant information on the websites of the bank
3. Providing a ready reckoner on frequently asked questions related to KYC
4. All of the above*
38. As a manager/Compliance officer, it is a part of your job to ____________.
1. Maintain your companies AML Program
2. Ensure that proper reports are filed and records are maintained
3. Ensure that all employees report suspicious activities
4. All of the above*
39. What factors and characteristics come into play for the process of customer profiling
1. buying patterns
2. creditworthiness
3. purchase history
4. All of the above*
40. CTR stands for ____________.
1. Custom Trafficking Report
2. Current Transaction Receipt
3. Currency Transaction Report*
4. Criminal Trading Raid
41. ______________ are engaged in selling goods and providing services, with large volume of business and often engaged in cash dealings.
1. Shell Companies
2. Front Companies*
3. Offshore Banking
4. Hawala Systems
42. Which of the following document/s can be accepted by banks as a proof of Customer Identification?
1. Electricity Bill
2. Salary Slip
3. Income/Wealth Tax Assessment Order
4. Election I card*
43. What should relevant employees be aware of
1. Policies and procedures put in place to prevent money laundering
2. Procedures put in place to prevent money laundering
3. KYC/AML guidelines issued by the RBI
4. All of the above*
44. What objective parameters can be used for enhanced due diligence
1. Customer location
2. Financial status
3. Nature of business
4. All of the above*
45. PAN (Permanent Account Number) is compulsory for Fixed Deposits, Remittances like DDs/TTS/RTCs etc _________.
1. if the amount exceeds Rs.10,000
2. if the amount exceeds Rs.25,000
3. if the amount exceeds Rs.50,000*
4. no such limit is fixed by the Income Tax Authorities
46. What are not the responsibility of the senior management
1. Appointment of PO
2. Managing the risk of money laundering
3. Internal Reporting Procedures
4. None of the above*
47. Which of the following is an example of smurfing?
1. Wiring money to a foreign country
2. A broker buying dollars with rupees
3. A drug dealer asking a stranger to buy money order with drug money*
4. All of the above
48. 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?
1. 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.
2. This situation requires enhanced due diligence because an offshore jurisdiction is involved*
3. This situation requires enhanced due diligence because the lawyer is clearly hiding something when he says he is under a client confidentiality obligation
4. None of the above
49. 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 ______________.
1. customer acceptance
2. customer identification*
3. accounts and transaction monitoring
4. risk management
50. What suspicion does frequent cash deposits in the account followed by ATM withdrawals at different locations with no valid explanation, can lead to
1. Doubtful source of cash deposited in bank account
2. Doubtful use of safe deposit locker
3. Suspicious use of ATM card*
4. None of the above
===============================
1. In the process of customer identification, the customer identification data should be updated __________ in 5 years in case of low risk category, and __________ in case of medium and high risk category customers.
1. Twice; 1 year
2. Once; 1 years
3. Twice; 2 years
4. Once; 2 years*
2. ____________ is the process of keeping the amount lower than that fixed for reporting and building similar transactions till the amount planned to be laundered is reached fully.
1. Entrailing
2. Lading
3. Slushing
4. Smurfing*
3.What information about the correspondent bank must be available
1. Major business activities
2. The bank's management
3. Level of AML/KYC compliance
4. All of the above*
4. Which of the following acts defines the offence of Money Laundering as under – “Engaging directly or indirectly in a transaction that involves property, that is proceeds of crime (or) derived from proceeds of crime (or) knowingly receiving, possessing, concealing, disguising, transpiring, converting, disposing off within the territories of India, removing form or bringing into the territory of India the property that is proceeds of crime”
1. Anti-Money Laundering Act, 2005
2. Active Money Laundering Act (AMLA), 2003
3. Prevention of Money Laundering Act (PMLA), 2002*
4. Impediment of Money Laundering Act (PMLA), 2002
5. Which of the following is a high risk activity?
1. A customer purchasing a car from a local garage
2. Printing a statement for a customer
3. A loan for home improvement
4. Money transfer to unknown third parties*
6. Please read the KYC practice given below. Identify the KYC element which best relates to the stated practice. Well-developed and applied customer assessments enable identification and classification of potentially high-risk customers. This is known as _____________.
1. customer acceptance*
2. customer identification
3. accounts and transaction monitoring
4. risk management
7. Which of the crime is not included under PMLA, 2002 for proceeds of crime
1. Drug trafficking
2. Kidnapping
3. Murder
4. None of the above*
8. Who file a report onward to the FIU-IND, if the Bank concludes that a transaction is suspicious
1. PO*
2. senior management
3. Internal Audit and Control team
4. None of the above
9. Laundering might attempt a series of small currency transaction over time because _____________.
1. a provision of the bank secrecy act requires the filing of CTR for a transaction exceeding Rs. 10 Lakhs*
2. Larger amount are too risky to carry around
3. that's the way in which launderers take in the funds
4. None of the above
10. The three stages of money laundering are ____________.
1. Layering, Placement, Refining
2. Placement, Refining, Integration
3. Refining. Integration, Layering
4. Integration, Layering, Placement*
11. What should awareness and training of staff on AML/KYC, should cover
1. need to know the true identity of the customer
2. need to know enough about the nature of business activities expected
3. to know what might constitute suspicious activity
4. All of the above*
12. Money laundering involves three independent steps that often occurs simultaneously. Which of the following best explains the layering in the process of money laundering?
1. Physically placing bulk cash proceeds
2. Separating the proceeds of criminal activity from their origin, through complex level of financial transactions*
3. Providing a legitimate explanation for the illicit proceeds
4. None of the above
13. What is not audited by Internal Audit and Control teams of the banks
1. adequacy of policies
2. adequacy of procedures
3. system support to detect suspicious and potential money laundering transaction
4. None of the above*
14. What should you consider when managing AML/CTF in your business?
1. Knowing your customer
2. Destination of funds
3. Methods of delivery such as cash, telephone and internet banking
4. All of the above*
15. When is induction training provided to employees
1. start of their employment*
2. end of their employment
3. Depends upon trainer availability
4. Depends upon training schedule
16. What services are offered by correspondent banks
1. International wire transfers
2. Cheque clearing
3. Cash/fund transfers
4. All of the above*
17. ____________ is a bank which is incorporated in a country where is no physical presence and is not affiliated to any regulated financial group.
1. Correspondent Bank
2. Shell Bank*
3. Respondent Bank
4. Compendium Bank
18. Which element of an effective transaction monitoring process, involves scrutiny of the transactions carried out by the customer over a longer period of time
1. Analysis of transactions*
2. Identification of Exceptional transactions
3. Enhanced Due Diligence
4. None of the above
19. Which of the following should be treated as a ‘customer’ for prudent KYC analysis?
1. any person or company which can conduct a transaction in relation to an account offered by a ban
2. any person who is a signatory to an account offered by a building society
3. any person or company which holds an account issued by a credit union
4. All of the above*
20. 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 ____________.
1. a certified copy of a birth certificate in conjunction with the customer's drivers licence and Medicare card
2. sighting original identification such as birth certificate and drivers licence
3. a reference from a good friend*
4. None of the above
21. ________________ services are used to buy or sell foreign currencies, to consolidate small denomination bank notes into larger ones, or to exchange financial instruments. Criminals are attracted to this method of laundering as they are not as heavily regulated as traditional financial institutions.
1. Remittance
2. Bureaux De Change*
3. Back-to-Back Loans
4. Collection Accounts
22. ________________ are fake companies that appear on paper, but may not physically exist.
1. Shell Companies*
2. Front Companies
3. Offshore Banking
4. Hawala Systems
23. During customer acceptance and identification activities, on which of the following customers should enhanced due diligence be conducted?
1. trustees, nominees, and fiduciaries
2. non-face-to-face customers
3. correspondent accounts
4. All of the above*
24. Which one of the following is a Valid document available to the bank for customer identification?
1. Election ID card*
2. Ration Card
3. Bank statement of account
4. Photograph
25. Which of the following terms is used to describe the process of sending money through multiple financial institutions to make it difficult to track?
1. Integration
2. Camouflage
3. Placement
4. Layering*
26. What should be recorded regarding records of employee training on AML/KYC
1. date of training
2. nature of the training received
3. attendance
4. All of the above*
27. Money derived from criminal activity is known as _______________.
1. Proceeds Possession
2. Proceeds of Crime*
3. Dirty Money
4. Crime Laundering
28. Money laundering is the result of crime and the persons behind the crimes appear to be using banking channels for the purpose of _______________. (I) fund transmission (II) creating a legal front of money raised through illegal and humanity demeaning methods.
1. Only (I) above
2. Only (II) above
3. Both (I) and (II) above*
4. None of the above
29. What should employees be aware about the handling of transactions which may involve money laundering
1. potential effect on the bank
2. potential effect on bank's employees
3. potential effect on bank's customers
4. All of the above*
30. Which of the following are required documents to establish both the identity and the correct address while opening accounts of companies? (I) Certificate of incorporation and Memorandum of Articles of Association (II) Resolution of Board of Directors to open an account, and identification of those who have the authority to operate the account (III) Power of Attorney granted to a partner or an employee of the firm to transact business on its behalf (IV) Copy of PAN allotment letter (V) Copy of telephone bill
1. (I), (II), (III) and (IV) above
2. (I), (II), (IV) and (V) above
3. (II), (III), (IV) and (V) above
4. (I), (II), (III), (IV) and (V) above*
31. _______________ is the provision of banking services by one bank to another bank.
1. Respondent Banking
2. Crude Banking
3. Correspondent Banking*
4. None of the above
32. While monitoring of customer transaction it should be ensured that there is no _________ i.e., manipulation of the size of transaction so that if seen individually they fall below the threshold that needs to be reported to the monitoring authority.
1. Entrailing
2. Structuring*
3. Lading
4. Slushing
33. AML/KYC guidelines are issued under ____________.
1. BR Act,1949
2. PMLA,2002
3. RBI Act
4. Both A and B above*
34. _____________ is a matrix of different components (such as source of funds, level of income, volume and frequency of transaction etc) that helps arrive at a benchmark transaction for individual customer transactions, against which a comparison can be made.
1. KYC Profile
2. Customer Risk Profile
3. Transaction Profile*
4. Interim Profile
35. 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 _____________.
1. customer acceptance
2. customer identification
3. accounts and transaction monitoring*
4. risk management
36. Money Laundering refers to ____________.
1. Conversion of cash in to gold
2. Conversation of assets into cash
3. Conversion of assets into cash
4. Conversion of money which is illegally obtained*
37. How does KYC checks be communicated to customers of bank
1. Incorporating the requirements in the account opening forms
2. Publishing relevant information on the websites of the bank
3. Providing a ready reckoner on frequently asked questions related to KYC
4. All of the above*
38. As a manager/Compliance officer, it is a part of your job to ____________.
1. Maintain your companies AML Program
2. Ensure that proper reports are filed and records are maintained
3. Ensure that all employees report suspicious activities
4. All of the above*
39. What factors and characteristics come into play for the process of customer profiling
1. buying patterns
2. creditworthiness
3. purchase history
4. All of the above*
40. CTR stands for ____________.
1. Custom Trafficking Report
2. Current Transaction Receipt
3. Currency Transaction Report*
4. Criminal Trading Raid
41. ______________ are engaged in selling goods and providing services, with large volume of business and often engaged in cash dealings.
1. Shell Companies
2. Front Companies*
3. Offshore Banking
4. Hawala Systems
42. Which of the following document/s can be accepted by banks as a proof of Customer Identification?
1. Electricity Bill
2. Salary Slip
3. Income/Wealth Tax Assessment Order
4. Election I card*
43. What should relevant employees be aware of
1. Policies and procedures put in place to prevent money laundering
2. Procedures put in place to prevent money laundering
3. KYC/AML guidelines issued by the RBI
4. All of the above*
44. What objective parameters can be used for enhanced due diligence
1. Customer location
2. Financial status
3. Nature of business
4. All of the above*
45. PAN (Permanent Account Number) is compulsory for Fixed Deposits, Remittances like DDs/TTS/RTCs etc _________.
1. if the amount exceeds Rs.10,000
2. if the amount exceeds Rs.25,000
3. if the amount exceeds Rs.50,000*
4. no such limit is fixed by the Income Tax Authorities
46. What are not the responsibility of the senior management
1. Appointment of PO
2. Managing the risk of money laundering
3. Internal Reporting Procedures
4. None of the above*
47. Which of the following is an example of smurfing?
1. Wiring money to a foreign country
2. A broker buying dollars with rupees
3. A drug dealer asking a stranger to buy money order with drug money*
4. All of the above
48. 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?
1. 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.
2. This situation requires enhanced due diligence because an offshore jurisdiction is involved*
3. This situation requires enhanced due diligence because the lawyer is clearly hiding something when he says he is under a client confidentiality obligation
4. None of the above
49. 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 ______________.
1. customer acceptance
2. customer identification*
3. accounts and transaction monitoring
4. risk management
50. What suspicion does frequent cash deposits in the account followed by ATM withdrawals at different locations with no valid explanation, can lead to
1. Doubtful source of cash deposited in bank account
2. Doubtful use of safe deposit locker
3. Suspicious use of ATM card*
4. None of the above
===============================
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