1. What is the primary purpose of the Know Your Customer (KYC) guidelines issued by the Reserve Bank of India?
A. To control frauds, identify money laundering, and monitor large value transactions
B. To enhance customer service and satisfaction
C. To streamline loan processing and approvals
D. To regulate interest rates and banking fees
The primary purpose of the KYC guidelines is to control frauds, identify money laundering, and monitor large value transactions.
2. Which of the following is NOT one of the four pillars of the KYC policy as outlined by the Reserve Bank of India?
A. Customer Acceptance Policy
B. Customer Safety Procedure
C. Risk Management (MLRC)
D. Monitoring of Transactions
The four pillars under the KYC policy are Customer Acceptance Policy, Customer Identification Procedure, Risk Management (MLRC), and Monitoring of Transactions.
3. Which report is NOT required to be submitted to FIU-IND under the KYC guidelines?
A. Cash Transactions Report (CTR)
B. Due Diligence Report (STR)
C. Counterfeit Currency Report (CCR)
D. Non-Profit Organizations Transactions Report (NTR)
The reports required to be submitted to FIU-IND include Cash Transactions Report (CTR), Suspicious Transactions Report (STR), Counterfeit Currency Report (CCR), Cross-Border Wire Transfer Report (EFT) and Non-Profit Organizations Transactions Report (NTR).
4. What is the timeline for banks to submit their reply after receiving a complaint under the KYC guidelines?
A. 7 days
B. 15 days
C. 30 days
D. 60 days
The timeline for banks to submit their reply after receiving a complaint is 15 days.
5. Which of the following is a report that banks must submit to the Financial Intelligence Unit-India (FIU-IND) under KYC guidelines?
A. Cash Transactions Report (CTR)
B. Loan Default Report (LDR)
C. Customer Satisfaction Report (CSR)
D. Banking Operations Report (BOR)
Banks are required to submit the Cash Transactions Report (CTR) to the Financial Intelligence Unit-India (FIU-IND) under KYC guidelines.
6. What is the value threshold for cash transactions that must be reported to FIU-IND under the Cash Transaction Reports (CTR)?
A. More than Rupees 5 Lakh or its equivalent in foreign currency
B. More than Rupees 15 Lakh or its equivalent in foreign currency
C. More than Rupees 10 Lakh or its equivalent in foreign currency
D. More than Rupees 20 Lakh or its equivalent in foreign currency
All cash transactions of more than Rupees 10 Lakh or its equivalent in foreign currency must be reported to FIU-IND.
7. What is the reporting time schedule for submitting the Cash Transaction Report (CTR) to FIU-IND?
A. By the 15th of the succeeding month
B. By the 10th of the succeeding month
C. By the 20th of the succeeding month
D. By the 25th of the succeeding month
The CTR for each month must be submitted to FIU-IND by the 15th of the succeeding month.
8. What is the time schedule for Data Centres to submit CTRs for branches to the Head Office?
A. By the 15th of the succeeding month
B. By the 10th of the succeeding month
C. By the 7th of the succeeding month
D. By the 4th of the succeeding month
Data Centres must submit CTRs for branches to the Head Office by the 4th of the succeeding month.
9. Who is responsible for ensuring the submission of CTRs for the entire bank to FIU-IND?
A. Data Centre Head
B. The Principal Officer of the Bank
C. Branch Managers
D. Compliance Officer of each branch
The Principal Officer of the bank is responsible for ensuring that CTRs for the entire bank are submitted to FIU-IND within the prescribed time schedule.
10. For cash transactions integrally connected within a month, what is the minimum aggregate value of transactions that must be reported?
A. Rupees 1 Lakh
B. Rupees 5 Lakh
C. Rupees 10 Lakh
D. Rupees 20 Lakh
For cash transactions integrally connected within a month, the aggregate value must exceed Rupees 10 Lakh for it to be reported to FIU-IND.
11. To which entity does the bank file all suspicious transactions as mentioned in the PMLA Rules?
A. Financial Intelligence Unit – India (FIU-IND)
B. Reserve Bank of India (RBI)
C. Securities and Exchange Board of India (SEBI)
D. Ministry of Finance
The bank files all suspicious transactions as mentioned in the PMLA Rules to the Financial Intelligence Unit – India (FIU-IND).
12. Which of the following is NOT a part of the definition of a "Suspicious Transaction" under the PMLA Rules?
A. Gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime
B. Appears to be made in circumstances of unusual or unjustified complexity
C. Is completed without any interruption by the customer
D. Appears to have no economic rationale or bona fide purpose
A "Suspicious Transaction" under the PMLA Rules includes transactions that give rise to a reasonable suspicion of crime, appear unusually complex, or lack economic rationale, but not transactions completed without interruption.
13. What should branches do if a customer abandons or aborts a transaction upon being asked to provide details or documents?
A. Ignore the transaction
B. Report the attempted transaction through the "AMLALERT" menu
C. Inform the customer that their transaction is incomplete
D. File an FIR with the local police
If a customer abandons or aborts a transaction upon being asked to provide details or documents, branches should report the attempted transaction through the "AMLALERT" menu.
14. Suspicious Transaction Reports (STRs) for mobile banking transactions are:
A. Not required as they are considered low risk
B. Filed only if the transaction exceeds a certain threshold
C. Filed only for international transactions
D. Filed in the same manner as normal banking transactions
STRs for mobile banking transactions are filed in the same manner as normal banking transactions.
15. Which of the following is NOT included in the indicative list of suspicious activities?
A. Transactions involving small amounts of cash
B. Transactions that do not make economic sense
C. Activities not consistent with the customer’s business
D. Attempts to avoid reporting/record-keeping requirements
Transactions involving small amounts of cash are generally not included in the indicative list of suspicious activities.
16. What action should the Regional Offices take if they receive an alert of an attempted suspicious transaction that was not completed by the customer?
A. Dismiss the alert as the transaction was not completed
B. File a Suspicious Transaction Report (STR) on the attempted transaction
C. Wait for the customer to complete the transaction before filing a report
D. Notify the customer and ask them to provide further details
Regional Offices should file an STR on the attempted transaction, even if it was not completed by the customer.
17. The definition of a "Suspicious Transaction" under the PMLA Rules includes transactions that:
A. Give rise to a reasonable ground of suspicion that they may involve the proceeds of crime
B. Appear to be made in circumstances of unusual or unjustified complexity
C. Appear to have no economic rationale or bona fide purpose
D. All of the above
All the options listed are part of the definition of a "Suspicious Transaction" under the PMLA Rules.
18. What is the role of bank employees when encountering activities not consistent with the customer’s business?
A. Ignore the activity if the transaction amount is small
B. Ask the customer for additional documentation and continue the transaction
C. Alert the customer about the inconsistency and cancel the transaction
D. Report the activity as suspicious through the STR process
Bank employees should report activities not consistent with the customer’s business as suspicious through the STR process.
19. Which of the following is true about the bank’s responsibility in filing STRs for mobile banking transactions?
A. The bank only needs to file STRs for mobile banking transactions above a certain threshold
B. STRs are filed only for domestic mobile banking transactions
C. STRs for mobile banking transactions are filed in the same way as for normal banking transactions
D. The bank is not required to file STRs for mobile banking transactions
STRs for mobile banking transactions are filed in the same way as for normal banking transactions, with no special exceptions or thresholds.
20. What is the correct action if a customer tries to avoid reporting or record-keeping requirements?
A. Proceed with the transaction after informing the customer of the requirements
B. Report the transaction as suspicious through an STR
C. Delay the transaction until further documentation is provided
D. Cancel the transaction immediately
If a customer tries to avoid reporting or record-keeping requirements, the transaction should be reported as suspicious through an STR.
21. What is the definition of a suspicious transaction according to the PMLA Rules?
A. A transaction involving cash only
B. A transaction with no economic rationale or bona fide purpose
C. A transaction that is made in the presence of a bank employee
D. A transaction involving foreign currency
According to the PMLA Rules, a suspicious transaction is one that appears to have no economic rationale or bona fide purpose, among other criteria.
22. How should branches report transactions that are abandoned or aborted by customers?
A. Ignore the transactions if they are incomplete
B. Report them through the “AMLALERT” menu
C. Report them directly to the bank’s internal auditor
D. Wait until the transaction is completed before reporting
Branches should report abandoned or aborted transactions through the “AMLALERT” menu, even if not completed by customers.
23. What type of activities should be reported as suspicious according to the indicative list?
A. Transactions involving small amounts of cash
B. Activities consistent with the customer’s business
C. Transactions that do not make economic sense
D. Regular transactions without unusual complexity
Transactions that do not make economic sense, among other unusual activities, should be reported as suspicious.
24. What should be done if a customer attempts to avoid reporting or record-keeping requirements?
A. Allow the transaction to proceed after informing the customer
B. Report the transaction as suspicious through an STR
C. Delay the transaction until the customer provides more details
D. Cancel the transaction immediately
If a customer attempts to avoid reporting or record-keeping requirements, the transaction should be reported as suspicious through an STR.
25. What does the definition of a suspicious transaction include according to the PMLA Rules?
A. Transactions made in large amounts of cash only
B. Transactions made by non-resident Indians only
C. Transactions that are completed without documentation
D. Transactions involving the proceeds of crime
The definition of a suspicious transaction includes transactions that may involve the proceeds of crime, among other criteria.
26. What should be done with transactions that arouse suspicion about certain bank employees?
A. Ignore and proceed with regular procedures
B. Investigate internally without external reporting
C. Report them as suspicious to the FIU-IND
D. Report to the bank’s compliance department only
Transactions that arouse suspicion about certain bank employees should be reported as suspicious to the FIU-IND.
27. What is an example of a suspicious activity according to the indicative list?
A. Transactions involving small, regular deposits
B. Transactions involving large amounts of cash
C. Transactions consistent with the customer's business
D. Transactions with a documented economic rationale
An example of a suspicious activity is a transaction involving large amounts of cash that do not make economic sense.
28. Which transactions should be filed through the menu “AMLALERT”?
A. All completed transactions above a certain amount
B. All attempted transactions, including those abandoned by customers
C. Transactions involving international transfers
D. Transactions where customers provide complete documentation
Transactions that are abandoned or aborted by customers should be reported through the menu “AMLALERT.”
29. What is the role of the Principal Officer in reporting suspicious transactions?
A. To validate and file Suspicious Transaction Reports (STRs) within the stipulated time
B. To review customer accounts for daily transactions
C. To handle customer complaints related to transactions
D. To monitor the bank’s financial performance
The Principal Officer is responsible for validating and filing Suspicious Transaction Reports (STRs) within the stipulated time.
30. What is the deadline for filing a Counterfeit Currency Report (CCR) to FIU-IND?
A. By 7th of the succeeding month
B. By 15th of the succeeding month
C. By the end of the month
D. Within 30 days of the transaction
The deadline for filing a Counterfeit Currency Report (CCR) to FIU-IND is by the 15th of the succeeding month.
31. What is the requirement for Cross-border Wire Transfer Reports (EFT) to FIU-IND?
A. Filed by the 15th of the succeeding month for transactions above five lakh rupees
B. Filed by the 7th of the succeeding month for transactions above one lakh rupees
C. Filed by the 20th of the succeeding month for transactions above ten lakh rupees
D. Filed by the end of the month for all transactions
Cross-border Wire Transfer Reports (EFT) are required to be filed with FIU-IND by the 15th of the succeeding month for transactions above five lakh rupees.
32. Which of the following is an indicator of suspicious activity?
A. Transactions with frequent small deposits
B. Transactions with documented economic purpose
C. Transactions involving unusual complexity or high cash amounts
D. Transactions that align with customer’s stated business
Suspicious activity indicators include transactions involving unusual complexity or large amounts of cash.
33. What should be the approach if a customer provides insufficient or suspicious information?
A. Proceed with the transaction and request additional information later
B. Cancel the transaction without reporting
C. Ignore the information if the transaction is low value
D. >Report the activity as suspicious
Insufficient or suspicious information provided by a customer should lead to reporting the activity as suspicious.
34. What is the deadline for filing Non-Profit Organisation Transaction Reports (NTR) to FIU-IND?
A. By 7th of the succeeding month
B. By 15th of the succeeding month
C. By the end of the month
D. Within 30 days of the transaction
The deadline for filing Non-Profit Organisation Transaction Reports (NTR) to FIU-IND is by the 15th of the succeeding month.
35. Which report should be filed if forged or counterfeit Indian currency notes are used?
A. Suspicious Transaction Report (STR)
B. Counterfeit Currency Report (CCR)
C. Cross-border Wire Transfer Report (EFT)
D. Non-Profit Organisation Transaction Report (NTR)
If forged or counterfeit Indian currency notes are used, a Counterfeit Currency Report (CCR) should be filed.
36. What is the primary objective of the KYC framework?
A. To ensure proper customer identification and monitoring of large value transactions
B. To provide customer service and support
C. To offer credit facilities to customers
D. To process transactions more quickly
The primary objective of the KYC framework is to ensure appropriate customer identification and to monitor large value transactions.
37. What must a bank do when establishing an account-based relationship with a customer?
A. Skip documentation for existing customers
B. Provide a loan immediately
C. Identify and verify the customer based on Officially Valid Documents (OVDs)
D. Offer a special discount on services
When establishing an account-based relationship, a bank must identify and verify the customer based on Officially Valid Documents (OVDs).
38. How frequently should KYC data be updated for low risk category customers?
A. Once in five years
B. Once in one year
C. Once in two years
D. Every month
KYC data should be updated at least once in five years for low risk category customers and not less than once in two years in case of high and medium risk categories.
39. What action should be taken when a transaction for a non-account based customer is equal to or exceeds Rs. 50,000?
A. Ignore the transaction
B. Report the transaction if it is conducted as a single transaction or appears connected
C. Delay the transaction for further review
D. Proceed without any special checks
Transactions for a non-account based customer equal to or exceeding Rs. 50,000 should be reported if conducted as a single transaction or if they appear connected.
40. What is required for transactions involving third-party products as agents?
A. Customer identification must be conducted
B. No special procedures are required
C. The transaction must be completed quickly
D. Only verbal confirmation is needed
Customer identification must be conducted when branches sell third-party products as agents.
41. What should be done if a customer is intentionally structuring transactions below the Rs. 50,000 threshold?
A. Report the activity as suspicious
B. Allow the transactions without any action
C. Increase the transaction limit
D. Request additional documentation from the customer
If a customer is intentionally structuring transactions below the Rs. 50,000 threshold, the activity should be reported as suspicious.
42. What is the responsibility of branches regarding the KYC data and CBS data?
A. No need to update data regularly
B. Only enter data in Finacle without updating CBS
C. Update KYC data annually and ignore CBS data
D. Enter all relevant information in Finacle and update CBS data regularly
Branches are responsible for entering all relevant information in Finacle and updating CBS data regularly.
43. What is the purpose of undertaking periodic KYC data updation?
A. To increase transaction limits
B. To ensure the accuracy and relevance of customer information
C. To provide discounts on banking services
D. To eliminate the need for customer documentation
The purpose of periodic KYC data updation is to ensure the accuracy and relevance of customer information.
44. Which of the following is a valid scenario for performing KYC procedures?
A. Establishing an account-based relationship with a new customer
B. Processing an internal bank transfer
C. Handling a routine customer service inquiry
D. Conducting marketing campaigns
KYC procedures are valid when establishing an account-based relationship with a new customer.
45. What is the role of RPTRA in maintaining KYC and CBS data?
A. It helps in generating reports to ensure data accuracy
B. It processes customer transactions only
C. It is used for customer service requests
D. It monitors bank employee performance
RPTRA is used to generate reports to ensure accuracy in KYC and CBS data.
