KYC (Know
Your Customer) 30 MCQs on KYC Guidelines (Part 2) for Bank Promotion Exams
KYC stands for
know your customer. It was introduced by Reserve Bank of India in 2004. As per
KYC guidelines, bank have to do Due diligence regarding identification of
customers, types & extent of their transactions depending upon their
profession / business and in monitoring them so that illegal transactions are
checked.
KYC (Know Your
Customer) is a very important topic from internal Bank promotion exams point of
view. Every year 1 to 3 questions are there in the internal bank promotion
exams question paper depending on the cadre. You may expect same number of
questions this year also. We have prepared some very important questions from
the mentioned topic for your guidance and studies. Questions are also followed
by the answers so that you develop an excellent understanding of the topic
before entering the examination hall. We will continue this series of question
on KYC in parts. The first part has 30 questions. All the best.
31. Scheduled
Commercial Banks, while extending the ‘At par’ cheque Facility to Cooperative
Banks/Regional Rural Banks have advised them to utilize this facility only for.
Option A. their own use.
Option B. their account holders who are KYC complied and
all transactions of Rs. 50, 000 or more
should be by debit to the customer’s account.
Option C. ‘Walk-in
customers ‘ against cash for less than Rs. 50, 0o0 per individual.
Option D. all above.
The correct
answer is Option D. All above.
32. In
compliance with all KYC/AML/CFT guidelines, while issuing ‘at par’ cheques,
banks should ensure that all ‘at par’ cheques issued by them are crossed.
Option A. Not Transferable.
Option B. ‘Account Payee’ if amount is Rs. 50, 000 or more.
Option C. ‘Account Payee’ irrespective of the amount.
Option D. Not Negotiable.
The correct
answer is Option C. ‘Account Payee’
irrespective of the amount.
33. The term
FIU-IND stands for.
Option A. Funds Investment Unit-India.
Option B. Financial Intelligence Unit-India.
Option C. Financial Information Unit-India.
Option D. Fiscal Intelligence Unit-India.
The correct
answer is Option B. Financial
Intelligence Unit-India.
34. As per the guidelines
stated under the Unlawful Activities (Prevention) Act, which of the following
is not a Regulatory body and is not entitled to appoint a UAPA nodal officer.
Option A. Ministry of External Affairs .
Option B. Department of Economic Affairs.
Option C. Ministry of Law and Justice.
Option D. FIU-IND.
The correct
answer is Option C. Ministry of Law and Justice.
35. the customer
identification along with photograph should be done at least once in ………. years
if he is high risk customer.
Option A. 2 years.
Option B. 3 years.
Option C. 5 years.
Option D. 8 years.
The correct
answer is Option A. 2 years.
36. The term
FATF under the Prevention of Money Laundering Act refers to-
Option A. Financial Action Task Force.
Option B. Financial Advisory Task Force.
Option C. Fiscal action task force.
Option D. Fiscal Amendment Task Force.
The correct
answer is Option A. Financial Action
Task Force.
37. As per RBI
guidelines, Banks are advised not to enter into a correspondent relationship
with a., which is incorporated in a country where it has no physical presence
and is unaffiliated to any regulated financial group.
Option A. Foreign bank.
Option B. Shell bank.
Option C. Respondent bank.
Option D. cooperative bank
The correct
answer is Option B. Shell bank.
38. As per the
amendments to PML Rules, every reporting entity is required to maintain the
record of all transactions Including the record of all cross-border wire transfers.
of more than or its equivalent in
foreign currency, where either the origin or destination of the Fund is in
India.
Option A. Rs. 2 lakh.
Option B. Rs. 3lakh.
Option C. Rs. 5lakh.
Option D. Rs. 7lakh.
The correct
answer is Option C. Rs. 5lakh.
39. As per RBI
guidelines, in case of domestic wire transfer if a bank has reason to believe
that a customer is intentionally structuring wire transfer to below to Several beneficiaries
so as to avoid reporting or monitoring, the bank must insist on complete
customer Identification before executing the transfer.’
Option A. Rs. 25,000.
Option B. Rs. 50,000.
Option C. Rs. 75,
000.
Option D. Rs. 1,00,000.
The correct
answer is Option B. Rs. 50,000.
40. As per
Prevention of Money Laundering Act, 2002, the ordering bank must retain the
originator information at least for a period of
Option A. 12 years.
Option B. 10 years.
Option C. 7 years.
Option D. 5 years.
The correct
answer is Option B. 10 years.
KYC (Know Your Customer) 30 MCQs on KYC Guidelines Part 1
41. As per
Prevention of Money Laundering Act, 2002, the receiving intermediary bank must
keep a record of originator information accompanying a cross-border wire
transfer received from the ordering bank at least for-
Option A. 2 years.
Option B. 3 years.
Option C. 5 years.
Option D. 10 years.
The correct
answer is Option D. 10 years.
42. Under what
circumstances can the beneficiary bank restrict or even terminate its business
relationship with the ordering bank?
Option A. If the ordering bank is a foreign bank.
Option B. If the ordering bank effects a transfer that
exceeds Rs. 50, 000.
Option C. If the ordering bank fails to provide
information on the remitter.
Option D. All above.
The correct
answer is Option C. If the ordering bank
fails to provide information on the remitter.
43. What are the
roles and responsibilities of a ‘principal Officer’ appointed by the bank under
KYC/AML/CFT guidelines?
Option A. Maintains close liaison with institutions
involved in the fight of terrorism.
Option B. Acts independently. And reports directly to
the senior management or to the Board of Directors.
Option C. Oversees and ensures overall compliance with
regulatory guidelines on KYC/AML/CFT issued from time to time and obligations
under the PMLA 2002, rules and regulations made thereunder, as amended from
time to time and Responsible for timely submission of CTR, STR and reporting of
counterfeit notes to FIU-IND.
Option D. All above.
The correct
answer is Option D. All above.
44. To ensure
compliance with the obligations under Section 13 of the Prevention of Money Laundering
(Amendment) Act, 2012, banks are advised to nominate a Director on their Boards
as
Option A. Chief Director.
Option B. Principal Officer.
Option C. Designated Director.
Option D. Director In-charge.
The correct
answer is Option C. Designated Director.
45. Government
of India, Ministry of Finance, Department of Revenue, has notified the Rules
under the prevention of Money Laundering Act (PMLA), 2002 via a notification in
the Gazette of India. The provisions of PMLA, 2002 with the said rules came
into effect from-
Option A. July 2, 2006.
Option B. July 1, 2005.
Option C. July 1, 2006.
Option D. July 2, 2005.
The correct
answer is Option B. July 1, 2005.
46. Banks should
ensure that records pertaining to the identification of the customer and his
address obtained while opening the account and during the course of business
relationship are properly preserved for at least after the business
relationship is ended.
Option A. 12 years.
Option B. 5 years.
Option C. 10 years.
Option D. 12 years.
The correct
answer is Option C. 10 years.
47. As under
PMLA Rules, the abbreviation NTR stands for-
Option A. Non-Traditional Revenue.
Option B. Non-profit organization Transaction Report.
Option C. New
Transaction Report.
Option D. Net Time Reference.
The correct
answer is Option B. Non-profit
organization Transaction Report.
48. As per PM LA
Rules, banks should maintain proper record of all transactions involving
receipts by non-profit organizations of value of Rs. ………………. or more in foreign
currency’.
Option A. 20 lakh.
Option B. 10 lakh.
Option C. 5 lakh.
Option D. 50 lakh.
The correct
answer is Option B. 10 lakh.
49. The Cash
Transaction Report (CTR) for each month should be submitted to FIU-IND by—-of
the succeeding month.
Option A. 5th.
Option B. 15th.
Option C. 7th.
Option D. 10th.
The correct
answer is Option B. 15th.
50. While filing
CTR, details of individual transactions below Rs. —need not be furnished.
Option A. 1,00,000.
Option B. 20,000.
Option C. 50,000.
Option D. 30,000.
The correct
answer is Option C. 50,000.
51. KYC
Directions have been issued by RBI under provisions of
Option A. Section 42 of RBI Act, 1934.
Option B. Section 35A of RBI Act, 1934.
Option C. Section 35 A of Banking Regulation Act of 1949.
Option D. Section 24 of Banking Regulation Act of 1949.
The correct answer
is Option C. Section 35 A of Banking
Regulation Act of 1949.
52. The main
objective of KYC Directions is to.
Option A. prevent banking companies from being used by
criminal elements for money laundering activities.
Option B. enable banks to know and understand about their
customers and their financial dealings in a better way.
Option C. combating financing of terrorism.
Option D. only Option A. and Option C. above.
The correct
answer is Option D. only Option A. and Option C.
above.
53. As per KYC
Directions of RBI, Banks should ensure that any remittance of funds by way of
demand draft, mail / telegraphic transfer or any other mode and issue of travellers’
cheques for value of……….is affected by debit to the customer’s account or
against cheques and not against cash payment.
Option A. Rs. 25,000
and above.
Option B. Rs. 50,000
and above.
Option C. Rs. 1,00,000 and above.
Option D. above R. 1 lakh.
The correct
answer is Option B. Rs. 50,000 and
above.
54. As per
current KYC Directions of RBI banks are required to maintain proper record of
cash transactions of.
Option A. deposit of Rs. 10 lakh and above.
Option B. withdrawal of Rs. 10 lakh and above.
Option C. deposit and withdrawal of Rs. 10 lakh and above.
Option D. deposit and withdrawal of over Rs. 10 lakhs.
The correct
answer is Option C. deposit and
withdrawal of Rs. 10 lakh and above.
55. 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 the
latest KYC Directions of RBI?
Option A. Driving license.
Option B. PAN card.
Option C. voter ‘s Identity card.
Option D. Ration card.
The correct
answer is Option D. Ration card.
56. As per the
latest instructions of RBI, with the objective of financial inclusion for
opening small accounts, banks need to seek only a photograph of the account
holder and self-certification of address.
outstanding balance in these account at any time will not exceed Rs. 50, 000 and total credit transactions not
exceeding Rs. 1,00,000 per year and withdrawals including other debits per
month not exceeding.
Option A. Rs. 25,000.
Option B. Rs. 5000.
Option C. Rs. 10000.
Option D. Rs. 3000.
The correct
answer is Option C. Rs. 10000.
57. Shri P.
K. Sharma, an old man of 65 years.
age is living with his son in
Noida. He has no independent proof of
his residence. He has approached your branch for opening his savings
account. As per RBI ‘s latest instructions,
we can open his account by.
Option A. waiving proof of residence.
Option B. obtaining utility bill of his son with a
declaration from his son that he is staying with him.
Option C. requesting him to restrict his balance within
Rs. 50,000.
Option D. both Option A. and Option C. above.
The correct
answer is Option B. obtaining utility
bill of his son with a declaration from his son that he is staying with him.
