Operational Aspects of KYC
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.
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Free sample — 8 of 78 rapid-fire Q&A cards.
Under which section of the Banking Regulation Act, 1949 does RBI issue KYC directions?
Section 35A.
KYC norms are aligned with which global standard-setter on AML/CFT?
FATF (Financial Action Task Force) — its 40 Recommendations.
KYC operates within which Act and its rules?
PMLA, 2002 and the PML Rules (PMLR), 2005.
Does KYC apply to small or dormant accounts?
Yes; it applies to all accounts and all transactions — no carve-out.
What document must every bank's Board approve covering KYC?
A Board-approved KYC Policy covering all four pillars.
Name the four mandatory pillars of KYC.
CAP, RM, CIP and MoT (Customer Acceptance Policy, Risk Management, Customer Identification Procedure, Monitoring of Transactions).
Which option is a common distractor for the fourth pillar?
"Customer Service" or "Marketing" — the real fourth pillar is Monitoring of Transactions.
State the four objectives of KYC.
Prevent financial crimes, identify the customer, ensure regulatory compliance, and secure the banking environment.
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