JAIIB · PPB

AML KYC guidelines

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.

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Q

What does AML stand for in the context of banking regulations?

A

AML stands for Anti-Money Laundering, which refers to laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income.

Q

What is the full form of PMLA in Indian banking context?

A

Prevention of Money Laundering Act, enacted in 2002

Q

What does KYC stand for and why is it mandatory for banks?

A

KYC stands for Know Your Customer, and it is mandatory for banks to verify the identity of customers to prevent fraud, money laundering, and terrorist financing.

Q

Which regulatory body issues AML/KYC guidelines to Indian banks?

A

Reserve Bank of India (RBI) issues these guidelines

Q

Which Indian legislation primarily governs anti-money laundering activities?

A

The Prevention of Money Laundering Act (PMLA), 2002, primarily governs anti-money laundering activities in India, and it came into force in 2005.

Q

What is the layering stage in the money laundering process?

A

Disguising the trail of illicit funds through complex transactions

Q

What is the role of the Financial Intelligence Unit-India (FIU-IND)?

A

FIU-IND is the central national agency responsible for receiving, processing, analyzing, and disseminating information relating to suspect financial transactions to enforcement agencies.

Q

What is the integration stage of money laundering?

A

Reintroducing laundered funds into the legitimate economy

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