AML CFT QUIZ ANSWERS

1. What is meant by ‘Contact Point Verification’ verification in respect of CDD of a Proprietorship

concern. Ans: Collecting such information as would be required to establish the existence of
such firm, and physically verifying the address and activity of the firm at the time of onboarding.
2. While in some cases the money mules may be innocent__________ , sometimes they might be
in connivance with the criminals to launder the funds. Ans : victims
3. I4C has been established to provide a framework and eco-system for _________ for dealing with
cybercrime in a coordinated and comprehensive manner. Ans: LEAs
4. If a branch decides to report a suspicious transaction, to whom it shall report ? Ans:AML-CFT
Department.
5. Reserve Bank Of India has allowed Banks & other regulated entities to use the Video-CIP
functionality for undertaking CDD for onboarding of – Ans: All of the above options are correct .
6. What are the three stages of money laundering? Please name the stages from stage one to three
? Ans: Placement followed by layering & Integration.
7. Accounts of NGOs,NPOs are considered more vulnerable and prone to _______. Ans: Money
Laundering and terror financing both.
8. What is full form of CFT ?Ans: Combating the financing of terrorism
9. Who has to comply with the offline RFIs? Ans: Branches/Operating Units
10. Which of the following is true regarding shell companies? Ans:All of the options are correct.
11. Small account means a savings account in a banking company where : Ans: All of the above.
12. Bank observes ___________ every year as AMl/CFT Awareness Day . Ans: 2nd November.
13. RE have to apply effective _________proportionate to the risks, while establishing business
relationships and/or carrying out transactions with persons, from or in countries that do not or
insufficiently apply the FATF recommendations. Ans enhanced due diligence measures.
14. Terrorist organizations also use charitable operations as covert fundraising operations to gather
funds from supporters overseas. Which of the following can be treated as a Red flagto identify
suspicious NGOs/NPOs. Ans : All the above options are correct.
15. Who are nominated as MLROs at Circle level as per the ‘AML CFT - Ans : DGM (C&R)
16. What area the stipulated monthly and annual limits on aggregate of transactions and balance
requirements in Small accounts : Ans : The aggregate of all credits in a financial year not to
exceed rupees One lakh, the aggregate of all withdrawals and transfers in a month not to exceed
rupees ten thousand and the balance at any point of time not to exceed rupees fifty thousand.
17. Bank should have a policy duly approved ______________, for approving correspondent banking
relationships. Ans: By the board of the Bank.
18. What constitutes the offence of Money Laundering? Ans: Converting/ attempting to convert
proceeds of crime to appear as untainted property constitutes the offence of Money Laundering.
19. What is the full form of I4C ? Ans:Indian Cyber Crime Coordination Centre.
20. Where the OVD furnished by the customer does not have an updated address, the bank can
accept a utility bill, as deemed OVD, for the limited purpose of proof of address. Which of the
following option is correct in respect of Utility Bill ? Ans; Utility which is not more than two
months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas,
Water bill ) can be accepted.
21. If a Branch decides to report a suspicious transaction haw it can report ? Ans: Through App in
CBS.
22. List of Banned Organisation is circulated to Banks by : Ans : RBI
23. Who has specified Know Your Customer Standardsto be followed by banks? Ans: Reserve Bank
Of India.
24. In the event of an existing customer or the beneficial owner of an existing account, subsequently
becoming a Politically Exposed Person(PEP) will the branches take enhanced due diligence
measures for such account? Ans: Yes branches should take enhanced due diligence measures for
such accounts.
25. What is the role of a Professional Money Launderer (PML)? Ans: All of the above options are
correct.Ans : All of the above options are correct.
26. Which of the following statement is correct regarding identification of beneficial owner in case
of a company? Ans : All the statements are correct.
27. Reserve bank Of India has allowed Banks and other Regulated entities to use the Video-CIP
functionality for undertaking CDD for onboarding of –Ans: All of the above options are correct.
28. Which of the following is true regarding Shell companies. Ans: All of the options are correct.
29. What is not true regarding KYC-AML-CFT of guidelines issued by RBI ? Ans- It prevents banks/FIs
from lending, funds to borrowers who can not provide proper KYC documents.
30. Which of the following is not correct regarding shell companies. Ans: Bank should open accounts
of Shell Companies/firms only after obtaining the desired documents.
31. In case an OVD, other than Aadhar number, submitted by a person for opening an account, does
not have current address, can a Branch open an account in such case ? Ans: Account can be
opened by obtaining certain prescribed documents known as ‘deemed OVDs’ for the limited
purpose of proof of current address.
32. Each business group/Circle /SBU designates an official to ensure proper implementation of
KYC/AML/CFT Policy in the Group/Circle/SBU and to report to the Principal Officer(AML-CFT)
What is the designation of such designated official? Ans: Money Laundering Reporting Officer.
33. Who has specified Know Your Customer standards to be followed by Banks? Ans: Reserve Bank
Of India
34. Ongoing due diligence in respect of customers is is ensured by way of _____________. Ans:
monitoring of transactions
35. What is the periodicity of Customer Risk Categorisation (CRC) for low risk Individuals and
entities. Ans: Every 10 Years
36. Mr CA is a member of the Institute of Chartered Accountants of India. He has been approached
for incorporation/formation/registration of a Company where one of the directors has been
identified as a designated individual. What is the obligation upon Mr CA , the Chartered
Accountant, under the provisions of Section 51 of UAPA 1967? Ans: Mr CA should not
incorporate /form/ register the company as well as should convey the complete details of such
designated individual /entity to UAPA Nodal Officerin the Ministry of Corporate Affairs without
tipping off to the Client.
37. I4C is envisaged to act as the nodal point to _________ Cyber crime in the country. Ans: curb
38. Ever increasing money mule accounts have become __________ a serious menace for Banks.
39. What is the threshold limit of transactions to be reported under Cross-Border Wire Transfer
Report. Ans: Transactions of the value of more than Rs Five Lakh or its equivalent in foreign
currency.
40. RBI shall forward the consolidated list of UAPA Nodal officers to the - Ans : banks
41. If cash is deposited in an account beyond the reporting threshold limit, what is the obligation
upon a Bank under Prevention of Money Laundering Act-2002? Ans: Reporting of transaction
under Cash Transaction Report (CTR) to FIU-IND.
42. Can a current account be opened in such a situation where it is not possible for the proprietor to
furnish more than one document in the name of the firm? Ans: if Bank is satisfied, Branch can
accept only one document in the name of the firm subject to ‘contact Point Verification”
43. It is very difficult to substantiate suspicious transactions without the correct details of ‘income’/
’annual turnover’ etc. in CBS. Do you agree with this statement? Ans : Yes
44. What can be the solution to such situation where Aadhar letter /card, submitted by a personfor
opening an account, does not have current address. Ans: Account can be opened by obtaining a
self-declaration from the customer regarding current address.
45. What is the prescribed periodicity of reporting eligible transactions under CBWTR? Ans: The
eligible transactions under CBWTR are to be reported on monthly basis by 15th day of the
seceding month.
46. SEBI shall forward the consolidated list of UAPA Nodal Officers to the ___________. Ans: every
intermediary regulated by SEBI.
47. Which of the following statement is correct regarding the identification of a beneficial owner ,
where the customer is a trust? Ans: Where the customer is a Trust, the identification of
beneficial owner(s) shall include identification of the author of the trust, the trustee, the
beneficiaries with 10% or more interest in the trust and any other natural person exercising
ultimate effective control over the trust through a chain of control or ownership.
48. Which of the following is true regarding Shell Companies? Ans: All of the options are correct.
49. Live location of the customer (Giotagging) is to be captured during Video CIP, to ensure that
customer is physically present in __________. Ans: India
50. What is the prescribed periodicity of reporting eligible transactions under CTR? Ans: The eligible
transactions under CTR are to be reported on monthly basis by 15th day of the succeeding
month.
51. PML Act 2002 prescribes that the records of documents evidencing identity of its clients and
beneficial owners shall be maintained for a period of __________ from the date of cessation of
business relationship between a client and the reporting entity. Ans: Five Years
52. Which of the following is NOT one of the Key elements of the KYC/AML/CFT policy of the Bank?
Ans: Customer Maintenance
53. Enhanced Due Diligence (EDD) is required to be exercised in respect of which type of customers
– Ans All of the above.
54. Can Updation/periodic updation of KYC for eligible customers be performed through Video-CIP ?
Ans- Yes, updation/ periodic updation of KYC for eligible customers through Video-CIP is allowed
by RBI.
55. Accounts opened on the basis of V-CIP or Video KYC are to be treated as _______. Ans: face to
face
56. All transactions passing through the domestic branches are processed by AML/CFT Cell using
_____________ software to generate alerts on prima facie Suspicious transactions based on
threshold fixed by bank for such filtration. Ans: AMLOCK software.
57. What is the major risk of non compliance with the KYC Policy? Ans: Compliance and Legal Risk.
58. What is the periodicity of Customer Risk Categorisation (CRC) for Medium Risk individuals and
entities? Ans: Every 8 years.
59. What is designated role of DGM (B&O) as per the AML/CFT structure in our BANK? Ans: Dy
MLRO.
60. _____________ has launched a national helpline number and rolled out https://cyber crime
.gov.in portal for reporting the financial cybercrime frauds by the victims. Ans: Ministry of Home
Affairs (MHA)