IIBF AML & KYC Notes 2026: Module A Anti-Money Laundering Complete Guide (PMLA
Looking for clear. Exam-ready IIBF AML KYC notes that actually help you remember the rules on exam day? You are in the right place.
This 2026 guide rebuilds the entire Module A &mdash. Anti-Money Laundering portion of the IIBF AML & KYC certification into short. Scannable sections.
With the exact reporting timelines. Monetary thresholds and document lists that examiners love to test.
Whether you are a fresh banker writing the paper for the first time or a working officer revising at the last minute. These notes condense the heavy legal language of the Prevention of Money Laundering Act. 2002 (PMLA) into plain English.
Read it once. Then revisit the tables. The key-takeaways box the night before your exam.
Key Takeaways — IIBF AML & KYC at a glance
- Module A = Anti-Money Laundering, built around the PMLA, 2002 and its 2005 Rules.
- Rule 3 tells banks which transactions to record; reporting goes to FIU-IND.
- CTR (Cash Transaction Report) is filed monthly. STR (Suspicious Transaction Report) within 7 days of forming suspicion.
- KYC means identifying and verifying every client. Plus the beneficial owner behind them.
- Always confirm the latest thresholds. Dates and timelines on the official IIBF notification before your attempt.
What Is the IIBF AML & KYC Certification?
The AML &. KYC examination conducted by the Indian Institute of Banking &. Finance (IIBF) certifies that a banker understands how to detect.
Prevent and report money laundering. It is one of the most practical IIBF papers. Every front-office and operations role touches KYC and transaction monitoring daily.
The paper is organised into modules, and Module A focuses entirely on Anti-Money Laundering. Master this module and you will have covered the highest-yield, most frequently tested portion of the syllabus. Strengthen it further with our mock tests and the free guides in our study library.
Why AML & KYC Knowledge Matters for Bankers
Money laundering is the process of making illegally obtained money appear legitimate. Banks sit at the centre of the financial system. So they are the first line of defence. Weak KYC or missed suspicious transactions can expose a bank to regulatory penalties. Reputational damage and even criminal liability.
That is exactly why IIBF tests this knowledge so rigorously &mdash. And why employers value the certificate.
Module A Syllabus — Anti-Money Laundering Overview
Before diving into the rules. Get a bird's-eye view of what Module A covers. The table below summarises the core themes the syllabus introduces.
| Theme | What You Must Know |
|---|---|
| Concept & origin | Definition of money laundering, how it originates, common techniques. |
| Stages | Placement, layering and integration; structuring of transactions. |
| Impact on banks | Risks from structuring and integration within the banking channel. |
| Legislation | PMLA, 2002 and its objectives; RBI guidelines; UK, USA and India frameworks. |
| Institutions | Basel Committee, IBA Working Group, FATF and Financial Intelligence Unit (FIU-IND). |
| Tools & co-operation | AML screening software, correspondent banking, exchange companies and international co-operation. |
Treat this table as your revision checklist. If you can explain each row in a sentence or two. You are in good shape for the exam.
PMLA, 2002 & the 2005 Rules: The Backbone of AML
The Prevention of Money-Laundering Act, 2002 is the principal law. Its operational detail comes from the 2005 Rules &mdash. Formally the Prevention of Money-laundering (Maintenance of Records...) Rules.
2005. Together they tell banks what to record. How to verify clients and what to report.
Two parts matter most for your notes: Rule 3 (which transactions to record). Section 12 (client identification). Let us break both down.
Rule 3 — Records to Be Maintained (Nature & Value)
Rule 3 obliges every banking company. Financial institution. Intermediary to maintain a record of the following categories of transactions. Memorise these — they appear repeatedly in objective questions.
- Cash transactions exceeding Rs. 10,00,000 (or its equivalent in foreign currency).
- A series of connected cash transactions each below Rs. 10,00,000 but aggregating above Rs. 10,00,000 within a month.
- Receipts by Non-Profit Organisations (NPOs) exceeding Rs. 10,00,000 (or foreign-currency equivalent).
- All cash transactions involving forged or counterfeit currency. Or where a valuable security or document was forged to facilitate the transaction.
- All suspicious transactions — whether in cash or not.
Suspicious and other recordable transactions can flow through many channels. The 2005 Rules list these methods explicitly, including:
- Deposits. Credits and withdrawals via cheques (including third-party cheques). Pay orders, demand drafts, cashier's cheques and electronic payments or debits.
- Travellers' cheques. Or transfers between accounts (including Nostro and Vostro) within the same institution.
- Credits or debits into non-monetary accounts such as demat or security accounts.
- Money transfers and remittances — payment orders. Wire/telegraphic transfers. Internet transfers, ACH remittances, lock-box transfers and loading of e-cards.
- Loans. Advances and contingent liabilities — subscription to debt instruments. Bill negotiation, forex and derivative contracts, and letters of credit or guarantees.
- Collection services in any currency (bills, cheques and instruments).
You do not need to memorise every channel word-for-word. Understand the principle: if value can move through it, it is recordable.
What Information Each Record Must Contain
A record is only useful if it lets the regulator reconstruct the transaction later. Under the Rules, every record must capture:
- The nature of the transaction.
- The amount and the currency in which it was denominated.
- The date of the transaction.
- The parties to the transaction.
The information must be maintained in the manner specified by the relevant regulator &mdash. RBI. SEBI or IRDAI — as updated from time to time.
Reporting to FIU-IND: CTR, STR & Counterfeit Reports
Maintaining records is only half the job. Banks must also report defined transactions to the Director. Financial Intelligence Unit – India (FIU-IND). The reporting timelines below are classic exam material, so learn them cold.
| Report | What It Covers | Reporting Timeline |
|---|---|---|
| CTR (Cash Transaction Report) | Cash transactions above Rs. 10,00,000 (individual transactions below Rs. 50,000 need not be furnished). | By the 15th of the next month. |
| STR (Suspicious Transaction Report) | Any transaction (cash or non-cash), or connected series, of a suspicious nature. | Within 7 days of forming suspicion. |
| CCR (Counterfeit Currency Report) | Cash transactions where forged or counterfeit Indian currency notes were used as genuine. | Within 7 working days of the transaction date. |
| NPO receipts | Receipts by non-profit organisations above Rs. 10,00,000. | By the 15th of the next month. |
One crucial behavioural rule: when an account is reported. The bank must not place restrictions on it merely for that reason. And staff must keep the fact of reporting strictly confidential. Tipping off the customer defeats the purpose of the STR.
Always confirm the latest thresholds. Timelines on the current official IIBF notification. FIU-IND guidelines before your attempt. As figures can be revised.
KYC: Verifying the Identity of Clients (Section 12)
Section 12 of the PMLA. 2002 requires every banking company. Financial institution. Intermediary to verify and maintain records of the identity of all clients. This is the legal heart of Know Your Customer (KYC).
At the start of an account-based relationship. The bank must identify the client. Verify that identity. And understand the purpose and intended nature of the relationship.
When Identity Must Be Verified for Non-Account Transactions
Even without opening an account, identification must be verified when carrying out:
- A transaction of Rs. 50,000 or more — whether a single transaction or several connected transactions; or
- Any international money-transfer operation.
If identity cannot be verified at the time of opening or executing the transaction. It must be verified within a reasonable time afterwards.
Who Is a Beneficial Owner?
Banks must also determine whether the client is acting on behalf of a beneficial owner. And if so, identify and verify that person too.
A beneficial owner is the natural person who ultimately owns or controls the client. Or the person on whose behalf a transaction is conducted &mdash. Including anyone exercising ultimate effective control over a juridical person. The key word is natural person: you must trace ownership down to a real human being. Not stop at a company name.
KYC Documents Required for Each Type of Client
This section is a goldmine for objective questions. The exam often asks which document set applies to which entity. Use the table below as your quick reference. Then read the notes that follow.
| Client Type | Key Documents Required |
|---|---|
| Individual | One certified copy of an officially valid document (identity + address). One recent photograph, and information on nature of business and financial status. |
| Company | Certificate of incorporation. MOA &. AOA. Board resolution and power of attorney for authorised signatories. OVDs of those officers. |
| Partnership Firm | Registration certificate. Deed of partnership. OVD of the person holding power of attorney to transact. |
| Trust | Registration certificate. Trust deed; OVD of the person holding power of attorney to transact. |
| AOP / BOI | Resolution of the managing body. Power of attorney. OVD of the POA holder; and information to collectively establish legal existence. |
What Counts as an Officially Valid Document (OVD)?
An officially valid document (OVD) typically includes the passport. PAN card. Driving licence.
Aadhaar card. Or the Voter's Identity Card issued by the Election Commission of India &mdash. Or any other document the regulator may specify.
Knowing this short list answers a surprising number of questions.
How to Study These IIBF AML & KYC Notes Effectively
Reading is not the same as remembering. Use this simple, proven study routine to lock in the material.
- Read once for understanding. Go through every H2 section so the logic of PMLA &rarr. Rule 3 → reporting → KYC makes sense as a story.
- Memorise the numbers. The Rs. 10,00,000 threshold, the Rs. 50,000 KYC trigger. The 15th-of-next-month CTR deadline. The 7-day STR rule are near-certain to appear.
- Drill the tables. Cover the right column. Recall the documents or timelines from the left column.
- Practise questions. Apply the rules under exam pressure with our mock tests and reinforce weak areas using the free guides.
- Revise the night before. Re-read only the key-takeaways box and the two comparison tables.
Common Mistakes Candidates Make in the AML & KYC Exam
Avoid these frequent traps. You will instantly score higher than the average candidate.
- Confusing CTR and STR timelines. CTR is monthly (by the 15th). STR is within 7 days of forming suspicion. Do not mix them up.
- Forgetting the Rs. 50,000 carve-out. Individual cash transactions below Rs. 50,000 need not be furnished in the CTR — but the Rs. 10,00,000 monthly aggregate rule still applies.
- Ignoring the beneficial owner. KYC is not complete until you trace control down to a natural person.
- Tipping off the customer. Reporting must stay strictly confidential. Never restrict an account merely because it was reported.
- Relying on outdated figures. Thresholds and timelines can change &mdash. Always cross-check the latest official IIBF notification.
Frequently Asked Questions (FAQ)
What does Module A of the IIBF AML & KYC exam cover?
Module A covers Anti-Money Laundering &mdash. The concept and stages of money laundering. The PMLA 2002 and its 2005 Rules. Record-keeping under Rule 3, reporting to FIU-IND, and KYC verification of clients. It is the highest-yield module in the paper.
What is the difference between a CTR and an STR?
A CTR (Cash Transaction Report) covers cash transactions above Rs. 10,00,000 and is filed monthly by the 15th of the following month. An STR (Suspicious Transaction Report) covers any transaction of a suspicious nature. Must be filed within 7 days of forming that suspicion.
Who is a beneficial owner under the PMLA?
A beneficial owner is the natural person who ultimately owns or controls the client. Or on whose behalf a transaction is conducted. Including anyone with ultimate effective control over a juridical person. Banks must identify and verify this person during KYC.
Which documents are accepted as officially valid documents (OVDs)?
Commonly accepted OVDs include the passport. PAN card. Driving licence.
Aadhaar card. Voter's Identity Card issued by the Election Commission of India. Plus any other document the regulator may specify.
Always confirm the current list on the latest official IIBF notification.
Is the IIBF AML & KYC certification difficult to pass?
It is very manageable with focused preparation. Because the questions are rule-based, candidates who memorise the thresholds and reporting timelines and practise with mock tests typically clear it comfortably on the first attempt.
Final Word: Turn These Notes Into a Confident Pass
The IIBF AML & KYC paper rewards precision, not luck. If you can recall the PMLA framework. Rule 3 record-keeping.
The CTR and STR timelines. And the KYC documents for each client type. You have already covered the questions that decide most results.
Read these notes today. Drill the two comparison tables, and put your knowledge to the test. With consistent revision and a few timed practice rounds. A confident pass is well within your reach &mdash. So start now and make this attempt your last.
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