What is KYC?
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.
1. The term KYC refers to
Option A. Know your currency.
Option B. Know your credit-rating.
Option C. Know your Customer.
Option D. Know your Company.
The correct answer is Option
C. Know your Customer.
2. The abbreviation AML stands
for.
Option A. Automatic Model Linking.
Option B. Anti-Money Laundering.
Option C. Anti-Money Lending.
Option D. none of the above.
The correct answer is Option
B. Anti-Money Laundering.
3. The term PMLA stands for.
Option A. Preventive Money Laundering Act.
Option B. provision of Money Lending Act.
Option C. Policy for Money Lending Act.
Option D. prevention of Money Laundering Act.
The correct answer is Option
D. prevention of Money Laundering Act.
4. The KYC/AML guidelines have
been issued by RBI under.
Option A. Section 35A of the Banking Regulation Act (BR Act),
1949.
Option B. Section 45Y of the Banking Regulation Act (BR Act),
1949.
Option C. Section 35A of the RBI Act , 1934.
Option D. Section 42 of the RBI Act, 1934.
The correct answer is Option
A. Section 35A of the Banking Regulation
Act, 1949.
5. Which of the following
statements is / are true with respect to KYC/AML/CFT guidelines?
Option A. Preventing banks from being used by criminal
elements for money laundering, intentionally or unintentionally.
Option B. Combating terrorist financing activities.
Option C. Enable banks to know/understand their customers
and their financial dealings in a more better way.
Option D. All above.
The correct answer is Option
D. All above.
6. As per the KYC guidelines, a
‘Customer’ is.
Option A. A person or entity that has an account and/or
has a business relationship with the bank.
Option B. The one (person/entity) on whose behalf the
account is maintained (i. e. The beneficial owner).
Option C. Beneficiaries of transactions done by
professional intermediaries, such as Stock Brokers, Chartered Accountants, Solicitors
etc. As permitted under the law.
Option D. All above.
The correct answer is Option
D. All above.
7. As per RBI guidelines, which
of the following should form the key elements of a bank’s KYC Policy?
Option A. Customer Acceptance Policy.
Option B. Customer Identification Procedure.
Option C. Risk Management & Monitoring of Transactions.
Option D. All above.
The correct answer is Option
D. All above.
8. Which of the Following
statements is not true as regards Customer Acceptance Policy (CAP)?
Option A. No account should be opened in anonymous or
fictitious/benami name (s).
Option B. No account should be opened or an existing
account is closed where the bank is unable to apply appropriate customer due
diligence measures.
Option C. Banks should prepare a profile for each new
customer based on it’s risk categorization.
Option D. NPOs/NGOs promoted by United Nations or its
agencies are classified as high-risk customer.
The correct answer is Option
D. NPOs/NGOs promoted by United Nations
or its agencies are classified as high-risk customer.
9. As per KYC guidelines, which
of the following documents Is/are not considered as Proof of identity by banks
while opening an account for an individual?
Option A. Passport.
Option B. Aadhaar card.
Option C. Voter’s Identity Card.
Option D. Ration Card.
The correct answer is Option
D. Ration Card.
10. Which of the following
documents is not considered as proof of address by banks while opening an
account for an individual?
Option A. Telephone Bill.
Option B. Bank Account Statement.
Option C. PAN Card.
Option D. Electricity Bill.
The correct answer is Option
C. PAN Card.
11. As per KYC guidelines, which
of the following documents do banks require to open an account for a company?
Option A. Certificate of incorporation.
Option B. Memorandum & Articles of Association.
Option C. Resolution of the Board of Directors to open
an account and identification of those who have authority to operate the
account & Copy of PAN allotment letter.
Option D. All above.
The correct answer is Option
D. All above.
12. As per KYC guidelines, which
of the following documents do banks require to open an account for a partnership
firm?
Option A. Registration certificate, if registered.
Option B. Partners hip deed.
Option C. Telephone bill in the name of firm/partners.
Option D. All above.
The correct answer is Option
D. All above.
13. As per KYC guidelines, all
trusts and foundations are required to submit documentary proof of their lawful
existence while opening an account in the bank. Which of the following does not
fulfil that criterion?
Option A. Certificate of registration, if registered.
Option B. Certificate of incorporation.
Option C. Power of Attorney granted to transact for
business on its behalf.
Option D. Resolution of the management body of the
foundation/association.
The correct answer is Option
B. Certificate of incorporation.
14. As per KYC guidelines, while
opening accounts for proprietorship concerns, banks require.
Option A. Registration certificate (in case of a
registered concern).
Option B. Certificate/license issued by the Municipal body/authorities
under Shop & Establishment Act.
Option C. Sales and income tax returns & CST/VAT certificate.
Option D. All above.
The correct answer is Option
D. All above.
15. As per KYC guidelines, while
opening a bank account for an individual, which of the following documents can
be used as proof of both identity and address?
Option A. Passport.
Option B. Voter’s Identity Card Voter’s Identity Card.
Option C. Aadhaar Card.
Option D. All above.
The correct answer is Option
D. All above.
16. What is the full form of
UCIC?
Option A. Unique Classified Information Code.
Option B. Unique Customer Identification Code.
Option C. Uniform Customer Identification Code.
Option D. User Category Identification Code.
The correct answer is Option
B. Unique Customer Identification Code.
17. Which accounts are considered
as ‘pooled’ accounts by banks?
Option A. Accounts managed by professional
intermediaries on behalf of entities like mutual funds, pension funds or other different
types of funds.
Option B. Accounts managed by lawyers /chartered
accountants or stockbrokers for funds held on deposit ‘or’ in escrow account for
a range of clients.
Option C. Accounts of varied clients initiated under
common schemes and/or belonging to the same demographic.
Option D. Only Option A. and Option B. above.
The correct answer is Option
D. Only Option A. and Option B.
above.
18. As per KYC guidelines, the
term ‘Beneficial Owner’ stands for.
Option A. natural person who ultimately owns or controls
a client.
Option B. the person on whose behalf the transaction is
being executed.
Option C. the person who exercises ultimate effective
control over a Juridical person.
Option D. all above.
The correct answer is Option
D. all above.
19. Controlling ownership
Interest means ownership of/entitlement to more than of shares or capital or
profits of the Juridical person, where the Juridical person is a company.
Option A. 30%.
Option B. 25%.
Option C. 20%.
Option D. 15%.
The correct answer is Option
B. 25%.
20. Controlling ownership
Interest means ownership of/entitlement to more than 15% of the capital or
profits of the Juridical person, where the Juridical person is a.
Option A. Partnership.
Option B. Company.
Option C. Body of individuals.
Option D. Unincorporated association.
The correct answer is Option
A. Partnership.
21. Controlling owners hip
Interest means ownership of/entitlement to more than of the property or capital
or profits of the Juridical person, where the Juridical person is an unincorporated
association or body of individuals.
Option A. 30%.
Option B. 25%.
Option C. 20%.
Option D. 15%.
The correct answer is Option
D. 15%.
22. It is not necessary to
identify and verify the identity of beneficial owner of.
Option A. a company listed on a stock exchange.
Option B. a majority-owned subsidiary of a company
listed on a stock exchange.
Option C. a trust.
Option D. Only Option A. and Option B. above.
The correct answer is Option
D. Only Option A. and Option B.
above.
23. A foreign student studying in
India wants to open a bank account here. The bank can open. Account on the
basis of his/her passport containing the proof of identity and address in the
home country along with a photograph and a letter offering admission from the
educational institution.
Option A. NRE.
Option B. NRO.
Option C. NRNR.
Option D. any one or more of the above.
The correct answer is Option
B. NRO.
24. The bank opens the account
for a foreign student with address verification still pending. The bank
instructs the student to operate it within 30 days period stating the condition
that foreign remittances must not exceed……………….in the account and monthly
withdrawal to not go beyond Rupees fifty thousand.
Option A. USD 2, 500.
Option B. USD 2, 000.
Option C. USD 1, 500.
Option D. USD 1, 000.
The correct answer is Option
D. USD 1,000.
25. In case of transactions
carried out by a non-account-based customer/walk-in customer, where the amount
of transaction is equal to or exceeds, whether conducted as a single
transaction or several transactions that appear to be connected, the customer’s
identity and address should be verified.
Option A. Rs. 1,00,000.
Option B. Rs. 75,000.
Option C. Rs. 50,000.
Option D. Rs. 25,000.
The correct answer is Option
C. Rs. 50,000.
26. If a bank suspects that a
customer is intentionally structuring a transaction into a series of
transactions below the threshold of…………….’The bank should verify the identity
and address of the customer and also consider filing Suspicious Transaction
Report (STR) to FIU-IND.
Option A. Rs. 1,00,000.
Option B. Rs. 50,000.
Option C. Rs. 25,000.
Option D. Rs. 75,000.
The correct answer is Option
B. Rs. 50,000.
27. The term SEBI stands for.
Option A. Stocks and Exchange Board of India.
Option B. Securities and Exports
Board of India.
Option C. Securitized Exchange
Board of India.
Option D. Securities and Exchange Board of India.
The correct answer is Option
D. Securities and Exchange Board of
India.
28. In order to rationalize the
KYC norms for entry of Foreign Portfolio Investors (FPIs), SEBI has categorized
FPIs based on their perceived risk profile. Which of the following is not part
of this categorization?
Option A. Government and Government related foreign investors
such as Foreign Central Banks, Governmental Agencies, etc.
Option B. Appropriately regulated broad based funds such
as Mutual Funds, Investment Trusts, Insurance / Reinsurance companies, etc.
Option C. Appropriately regulated entitles such as
Banks, Asset Management companies.
Option D. University related Endowments not registered
with SEBI.
The correct answer is Option
D. University related Endowments not
registered with SEBI.
29. Which of the following KYC
documents is/are mandatory for eligible Foreign Portfolio Investors (FPIs) for
opening a bank account for the purpose of Investment under Portfolio Investment
Scheme (PIS)?
Option A. memorandum and articles of association.
Option B. PAN Card.
Option C. certificate of Incorporation Association.
& SEBI Registration Certificate.
Option D. All above.
The correct answer is Option
D. All above.
30. As per the Prevention of
Money-laundering Third Amendment Rules, 2010,’small account’ means a savings
account in a banking company where.
Option A. the aggregate of all credits in a financial
year does not exceed Rs. 1, 00, 000.
Option B. the aggregate of all withdrawals and transfers
in a month does not exceed Rs. 10, 000.
Option C. the balance at any point of time does not
exceed Rs. 50, 000.
Option D. all above.
The correct answer is Option
D. All above.
