KYC Policy and Customer Acceptance Policy
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for KYC, AML and CFT — KYC, AML and CFT.
One-liners from this chapter
Free sample — 8 of 72 rapid-fire Q&A cards.
What is the primary foundation of modern banking?
Knowing Your Customer (KYC) framework to identify and verify customer identity and creditworthiness.
What does Customer Acceptance Policy (CAP) serve as?
The first gate through which prospective customers must pass before account opening.
Name four risks KYC/CAP protects banks from.
Money laundering, terrorism financing, fraud, sanctions violations, and reputational damage.
What historical practice preceded formal KYC requirements?
Obtaining formal introduction from existing accountholders of good standing before accepting new customers.
What was the consequence when introduction was unavailable?
Operating restrictions imposed, typically no cheque-book facility until customer fully verified.
When was FATF constituted and why?
1989 by G-7 to develop AML/CFT standards in response to organised money laundering.
How does Credit CDD differ from AML CDD?
Credit CDD is borrower-specific, one-time at sanction; AML CDD applies continuously to entire customer base.
Why must KYC Policy be board-approved?
KYC obligations under PMLA 2002 are enterprise-wide; board approval ensures consistent implementation across bank.
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