KYC & Money Laundering Questions - India’s #1 Learning Platform See cuba lc ela) Re eect eos ey aes Des Creer cag & Quizzes B Download App Question 1: Which of the following statements is true about Know Your Customer (KYC) regulations? 1. KYC means Know Your Customer 2. It was introduced under Prevention of Money Laundeting Act 3. KYC process includes ID card Verification, face verification, document verification such as utility bills as proof of address, and biometric verification. 4, Banks must comply with KYC regulations and anti-money laundering regulations to limit fraud. rene (eee ire] India's Super Teachers for all govt. exams LU ol ea E oles CeesAnswer (Detailed Solution Below) Option 5: All are true Win over the concepts of VC & \Vioney Laundering and get a step ahead with the preparations for Banking and Financial Awareness with Testbook. KYC & Money Laundering Question 1 Detailed Solution é The correct answer is All are true. > % © Key Points + The Reserve Bank of India ty Krow your customer (KYC) guidelines for all banks in 2002. + In 2004, RBI directed that all banks ensure that they are fully acquiescent with the KYC provisions before December 31, 2005. + The main aim of KYC was to prevent money laundering, terrorist financing, and theft. + Banks should frame their KYC policies incorporating the following four key elements: » Customer Acceptance Policy, » Customer Identification Procedures, » Monitoring of Transactions and » Risk Management. + Money laundering is the process of making large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. + The Prevention of Money Laundering Act was introduced in 2002 and came into force with effect from 2005. & S & India’s #1 Learning Platform Start Complete Exam Preparation acc Gad er 22 ee fea f aca resect reser Download App Question 2: View this Question Online > In September 2022, the Reserve Bank has imposed a penalty of how many rupees Industrial Bank of Korea for non-compliance with certain Know Your Customer (KYC) norms? .: 30 : eo 4, 40 lakh 5. 36 lakh ‘Answer (Detailed Solution Below) Option 5: 36 lakh KYC & Money Laundering Question 2 Detailed Solution Exons) Know Your Customer (kYC) regulations have been introduced in financial transactions under which of the following regulation? " Companies Act 2. Prevention of Money Laundering Act 3. Reserve Bank of India Act 4. Companies Act ef . Banking Regulation Act Answer (Detailed Solution Below) Option 2: Prevention of Money Laundering Act KYC & Money Laundering Question 3 Detailed Solution The correct answer is the Prevention of Money Laundering Act. © Key Points + The Reserve Bank of India introduced Know your customer (KYC) guidelines for all banks in 2002. : + In 2004, RBI directed that all banks ensure that they are fully acquiescent with the KYC provisions before December 31, 2005, + The main aim of KYC was money laundering, terrorist financing, and theft.+ Banks should frame their KYC policies incorporating the following four key elements: © Customer Acceptance Policy, ~ Customer Identification Procedures, » Monitoring of Transactions and » Risk Management. + Money laundering is the process of making large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. + The Prevention of Money Laundering Act was introduced in 2002 and came into force with effect from 2005. India's #1 Learning Platform Start Complete Exam Preparation Recah oe puoi call era Practice ie} ered Coser Question Bank Download App Question 4: View this Question Online > KYC compliance is a mandatory exercise under the prevention of 2 1. Money Laundering Act, 2001 2. Money Laundering Act, 2004 3. crc Act, 2002. 4. Money Laundering Act, 2006 5, Money Laundering Act, 2007 Answer (Detailed Solution Below) Option 3 : Money Laundering Act, 2002. ‘ KYC & Money Laundering Question 4 Detailed Solution f _The correct answer is Money Laundering Act, 2002 ~~ © Key Points + KYC compliance is a mandatory exercise under the Prevention of Money Laundering Act, 2002. » Important Points ~ + ‘Know Your Customer’ which refers to the process of identity and addresses verification of all customers and clients by banks, insurance companies, and other institutions either before or while they are conducting transactions with their customers. + While using the e-KYC service, one has to authorize through the Unique Identification Authority of India (UIDAI), by directly providing identity/address through biometric authentication to the bank or any business correspondent. ean erica) Start Complete Exam Prepara Reo Dan oe cc aca ProTs fara ea Perera Cre eas pats Download App Question 5: View this Question Online > Know your Customer (KYC) / Anti-Money Laundering (AML) / CFT guidelines to prevent bank from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities, what does 'C" stands in "CFT'? 1. Countering ) 2. Case 2 a 4, Combating 5. None of theseAnswer (Detailed Solution Below) Option 4: Combating KYC & Money Laundering Question 5 Detailed Solution The correct answer is Combating. ‘ * Criminal activities, such as drug trafficking, smuggling, human trafficking, corruption, and others, tend to generate large amounts of profits for the individuals oF groups carrying out the criminal act. However. by using funds from such Illicit sources, criminals risk drawing the authorities’ attention to the underlying criminal activity and exposing ‘themselves to criminal prosecution. In order to benefit freely from the proceeds of their crime, they must therefore conceal the illicit origin of these funds, these types of funds: ‘are coming under the category of money laundering activities. + Terrorist financing invc that they may be used to: legal and illicit sources. + Antl- Money Laundering (AlML) and Combating the Financing of Terrorism (CFT) is the regimes which are maintained by the Financial Action Task Force (FATF) to combating the money laundering activities for terrorist activities in whole over the world. & Additional Information a solitation, collection, or provision of funds with the intention terrorist acts or organizations. Funds may stem from both + FATF Headquarters - Paris, France + FATF Head - T Raja Kumar + Establishment Year - 1989 ‘Top KYC & Money Laundering MCO Objective Questions Ee array Start Complete Exam Preparation Gao elise aie cod ts eae cers Download App Question 6: View this Question Online > Know your Customer (KYC) / Anti-Money Laundering (AML) / CFT guidelines to prevent bank from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities, what does "C" stands in "CFT"?1. Countering 1m 4? 4. Combating 5. None of these Answer (Detailed Solution Below) Option 4: Combating KYC & Money Laundering Question 6 Detailed Solution “ah The correct answer is Combating. + Criminal activities, such as drug trafficking, smuggling, human tr ruption, and others, ‘tend to generate large amounts of profits for the individual carrying out the criminal act. However, by using funds from such illicit s risk drawing the authorities’ attention to the underlying criminal activity and iemselves to criminal prosecution. In order to benefit freely from the proceeds of ey must therefore conceal the illicit ing under the category of money laundering origin of these funds, these types activities. + Terrorist financing involv ‘olicitation, collection, or provision of funds with the intention that they may be used to terrorist acts or organizations. Funds may stem from both legal and illicit sources. + Antl- Money Laundering (AIL) and Combating the Financing of Terrorism (CFT) is the regimes which are maintained by the Financial Action Task Force (FATF) to combating the money laundering activities for terrorist activities in whole over the world. & Additional Information + FATF Headquarters - Paris, France + FATE Head - T Raja Kumar * Establishment Year- 1989Fog ee ec @ tus SS Ea ery ele LiCl) aR cosas rears Practice Py CCS cielo Question Bank Download App Question 7: @ View this Question Online > Exons) Know Your Customer (KYC) regulations have been introduced in financial transactions under which of the following regulation? %” Companies Act 2. Prevention of Money Laundering Act 3. Reserve Bank of India Act 4. Companies Act Answer (Detailed Solution Below) Option 2: Prevention of Money Laundering Act KYC & Money Laundering Question 7 Detailed Solution The correct answer is the Prevention of Money Laundering Act. © Key Points + The Reserve Bank of India introduced Know your customer (KYC) guidelines for all banks in 2002. 3 + In 2004, RBI directed that all banks ensure that they are fully acquiescent with the KYC provisions before December 31, 2005. + The main aim of KYC was to prevent money laundering, terrorist financing, and theft. ‘a+ Banks should frame their KYC policies incorporating the following four key elements: © Customer Acceptance Policy, ~ Customer Identification Procedures, » Monitoring of Transactions and » Risk Management. + Money laundering is the process of making large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. + The Prevention of Money Laundering Act was introduced in 2002 and came into force with effect from 2005. & & India’s #1 Learning Platform Pore Start Complete Exam Preparation by 1,86,00,449« Student Que: Excise Pie for aa al ies [=] Download App Question 8: View this Question Online > Know your Customer (KYC) / Anti-Money Laundering (AML) / CFT guidelines to prevent bank from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities, what does 'C" stands in "CFT"? 1. Countering t1at J 2 cee ee rN 4. Combating 5. None of these Answer (Detailed Solution Below) Option 4: CombatingES & ROnSY LAUICSING SUSSEON 5 USO non The correct answer is Combating. + Criminal activities, such as drug trafficking, smuggling, human trafficking, corruption, and others, tend to generate large amounts of profits for the individuals or groups carrying out the criminal act. However, by using funds from such Illicit sources, criminals risk drawing the authorities’ attention to the underlying criminal activity and exposing themselves to criminal prosecution. In order to benefit freely from the proceeds of their crime, they must therefore conceal the illicit origin of these funds, these types of funds are Coming under the category of money laundering activities. + Terrorist financing invo solicitation, collection, or provision of funds with the intention that they may be used to tortorist acts or organizations. Funds may stem from both legal and illicit sources. + Anti- Money Laundering (AML) and Combating the Financing of Terrorism (CFT) is the regimes which are maintained by the Financial Action Task Force (FATF) to combating the money laundering activities for terrorist activities in whole over the world. ©; Additional Information + FATF Headquarters - Paris, France + FATF Head -T Raja Kumar + Establishment Year- 1989 & eee areal Renn yee Start Complete Exam Preparation Pees peated DS cuered Creer D> Download App Question 9: View this Question Online > Know Your Customer (KYC) regulations have been introduced in financial transactions under which of the following regulation? 1. Banking Companies Act ‘ ae India Act 2. Prevention of Money Laundering ‘Act4. Companies Act 5. Banking Regulation Act Answer (Detailed Solution Below) Option 2 : Prevention of Money Laundering Act KYC & Money Laundering Question 9 Detailed Solution The correct answer is the Prevention of Money Laundering Act. © Key Points ss + The Reserve Bank of India introduced Know your customer (KYC) guidelines for all banks in 2002. = com, © + In. 2004, RBI directed that all banks ensure that they are fully acquiescent with the KYC provisions before December 31, 201 + The main aim of KYC was tolpkevent money laundering, terrorist financing, and theft. + Banks should frame th icles incorporating the following four key elements: ~ Customer Acceptance Policy, » Customer Identification Procedures, » Monitoring of Transactions and » Risk Management. + Money laundering is the process of making large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source, + The Prevention of Money Laundering Act was introduced in 2002 and came into force with effect from 2005. India’s #1 Learning Platform Re Seamer) (ee Cl ely) caleron eed POS ese cng Download App Question 10: View this Question Online > Ts KYC compliance is a mandatory exercise under the prevention of 71. Money Laundering Act, 2001 2. Money Laundering Act, 2004 3. A resins Act, 2002, 4. Money Laundering Act, 2006 5. Money Laundering Act, 2007 Answer (Detailed Solution Below) Option 3 : Money Laundering Act, 2002. KYC & Money Laundering Question 10 Detailed Solution The correct answer is Money Laundering Act, 2002 © Key Points : + KYC compliance is a mandatory exercise under the Prevention of Money Laundering Act, 2002. » Important Points ~ + ‘Know Your Customer’ whicti refers to the process of Identity and addresses verification of all customers and clients by banks, insurance companies, and other institutions either before or while they are conducting transactions with their customers. * While using the e-KYC service, one has to authorize through the Unique Identification Authority of India (UIDAI), by directly providing identity/address through biometric authentication to the bank or any business correspondent. India’s #41 Learning Platiorm Start Complete Exam Preparation Ore eaicd Was Pca (oreo Download App PaesQuestion 11: View this Question Online > oO Which of the following steps are involved in Ne G 1. Placement 2. Layering 3. Integration Oo 4, Counterfeiting S 1. Only2 ma | 2 3. Only3and4 4. Only 1,2 and 3 5. 1,23 and 4 Answer (Detailed Solution Below) Option 4: Only 1,2 and3 KYC & Money Laundering Question 11 Detailed Solution The Correct Answer is Only 1,2 and 3 XO + Money laundering is concealing aso he identity of illegally obtained proceeds so that they appear to have ori fro ‘ate sources. It is frequently a component of other, much more serious, ci h as drug trafficking, robbery or extortion. + According to the IMF, «| ney Laundering is estimated between 2 to 5% of World GDP. + Itinvolves three steps: placement, layering and integration. » Placement puts the ‘dirty money” into the legitimate financial system » Layering conceals the source of the money through a series of transactions and bookkeeping tricks. > In the case of integration, the now-laundered money is withdrawn from the legitimate account to be used for criminal activities.Fog ee ec SS Ea ery ele LiCl) rears Practice Py CCS cielo Question Bank Download App Question 12: View this Question Online > Exons) In September 2022, the Reserve Bank has imposed a penalty of how many rupees Industrial Bank of Korea for non-compliance with certain Know Your Customer (KYC) norms? ‘ y 1, 2d lakh Wh 3. 48 lakh 4. 40 lakh 5. 36 lakh ‘Anewer (Detailed Solution Below) Option 5 : 36 lakhAe India's #1 Learning Platform Seamer) (ee Cl ec liyi) PaaS faercd fi j Cee aay POS ese cng Download App puoi Question 13: View this Question Online > Which of the following statements is true about Know Your Customer (KYC) regulations? 1. KYC means Know Your Customer 2. It was introduced under Prevention of Money Laundering Act 3. KYC process includes ID card verification, face verification, document verification such as utility bills as proof of address, and biometric verification, 4, Banks must comply with KYC regulations and anti-money laundering regulations to limit fraud. 5. Allare true Answer (Detailed Solution Below) Option 5: All are trueIndia's #1 Learning Platform Rea oes Start Complete Exam Preparation Prats Pm aiacs a DS tierce CRs & Quizzes Download App Question 14: View this Question Online > Enforcement Directorate enforces the Prevention of Money Laundering Act, 2002 (PMLA). the Enforcement unit was formed in which of the following years? 1, 1984 2. 1972 3. 1956.4, 1947 5. 1966 Answer (Detailed Solution Below) Option 3: 1956 Tee eae Rae - Start Complete Exam Preparation ere RT call eu Pec ie) rd Dorian Question Bank Download App Question 15: View this Question Online > Cx In Aug 2020, which of the following has received clearance from UIDAI to carry out e-KYC authentication using Aadhaar? 1. IRCTC2. InfoEdge 3. CDSL 4. NSDL 5. None of the above Answer (Detailed Solution Below) Option 3: CDSL