AML-KYC

Checkout Vskills Interview questions in AML KYC to prepare for your next job role. The
questions are submitted by professionals to help you to prepare for the Interview.

Q.1When is induction training provided to employees?

Induction training is provided to employees at the start of their employment.
Induction training is a form of introduction for new starters in order to enable
them to do their work in a new profession or job role within a business (or
establishment).
Q.2What BR Act, 1949 contains?
It contains AML/KYC Guidelines.
Q.3CTR stands for?
Cash transaction report as per PMLA.

Also referred as currency transaction report

Q.4What do you mean by Money Laundering?

Money laundering is the process of concealing the source of money obtained
by illicit means such as gambling, corruption, extortion, drug trafficking,
human trafficking, etc., Money is moved around the financial system again
and again in such manner that its origin gets hidden. It is the process of
making dirty money clean.
Q.5Please read the KYC practice given below. Identify the KYC element
which best relates to the stated practice. Effective information-gathering
strategies enable building of a solid information base about each
customer. This is known as ______________.
Customer identification, It involves effective information-gathering strategies
enable building of a solid information base about each customer. Banks are
required to clearly spell out the Customer Identification Procedure to be
carried out at different stages i.e. while establishing a banking relationship;
carrying out a financial transaction or when the bank has a doubt about the
authenticity/veracity or the adequacy of the previously obtained customer
identification data.
Q.6What are the objectives of KYC?
The objectives of KYC is to ensure appropriate customer identification,
Monitor transactions of suspicious nature.
Q.7What are the stages of money laundering?
The three stages of money laundering are Integration, Layering, Placement.

Q.8Why is there a need to perform Anti-Money Laundering Checks?

Since the AML regulations are governed by Acts namely - The Proceeds of
Crime Act, The Serious Organised Crime and Police Act, The Terrorist Act
and the Money Laundering Regulations. Any failure to report suspicious
activity can carry a criminal sentence and lead to substantial fines from the
relevant regulatory body.

Q.9If you have dealt with my clients for many years, so will you still need
to carry out customer due diligence?
We need to keep customer due diligence up-to-date for all the clients. We
would require to have sufficient documentary ID details on the files but if there
has been any subsequent change to their circumstances or risk profile, we
should update the customer due diligence.

Q.10What do you understand by money laundering and financial

terrorism?
Money laundering is the conversion of money illegally obtained to make it
appear as if it originated from a legitimate source. Money laundering is
employed by launderers worldwide to conceal criminal activity associated with
it such as drugs trafficking, terrorism and extortion.

Q.11What is a KYC Policy?

With reference to RBI guidelines issued vide all banks are required to
formulate a KYC Policy with the approval of their respective boards. The KYC
Policy consists of following key elements - 1. Customer Acceptance Policy 2.
Customer Identification Procedures 3. Monitoring of Transactions 4. Risk
Management.

Q.12What do you understand by Customer Identification Procedure?

Customer Identification refers to identifying the customer and verifying identity
through reliable and independent documents, data and information. In which
case the banks would need to satisfy to the competent authorities that due
diligence was observed in accordance with the requirements of existing laws
and regulations.
Q.13 Who Is A Customer?
If our main Purpose here is the KYC Policy then 'a Customer' can be defined
as: Someone who maintains his/her account and/or has a business
relationship with the bank; Or say the one on whose behalf the account is
maintained (i.e. the beneficial owner); Beneficiaries of transactions conducted
by professional intermediaries, such as: Chartered Accountants, Stock
Brokers, Solicitors etc as permitted under the law, and Any person who has a
connection with some financial transaction which can pose consequential
reputational or other risks to the bank, like- a wire transfer or issue of high
value demand draft as a single transaction.
Q.14 Under which conditions KYC should be applied?
Under which conditions KYC should be applied? There are condiotions to
which KYC applies but *Please-Note: its not limited to: At the opening of a
new acount the acount type is deposit/borrowal. At the opening of a
subsequent account where documents as per current KYC standards not
submitted, at the time ofopening the initial account. At the opening of a locker
facility where these documents are not available with the bank for all locker
facility holders. Based on the conduct of the account when the bank feels it is
necessary to obtain additional information from existing customers. After
periodic intervals as instructed by the RBI. Also, if there are changes to
signatories, mandate holders, beneficial owners, etc.
Q.15 What Is A Customer Acceptance Policy?
The general guidelines followed by banks to allow customers to open
accounts with them refers to Customer Acceptance Policy. Generally the
guidelines stipulate that no accounts shall be opened in anonymous or
hypothecial names or when the identity of the customer matches with any
person with known criminal background or banned entities. In the same way
the accounts should not be opened when the bank is not in the state to verify
the identity and/or obtain documents required as per the bank’s policy.
Q.16 What unit are the Aml/cft Supervisors wanting For?
The AML/CFT supervisors area unit that specialize in whether or not the
coverage entity has an acceptable and cheap risk assessment, and an
AML/CFT programme that reflects and controls those risks. The AML/CFT
supervisors take a risk-based approach to supervising - choosing from the
supervising and social control tools out there to United States. supervising can
take under consideration the character of the business and also the risks that
every coverage entity is managing. browse our Bulletin article or speech for
additional data on the Reserve Bank’s approach to AML/CFT supervising
Q.17 What Ongoing Customer Due Diligence means?
Regularly reviewing customer information and having systems to conduct
account monitoring is what the Ongoing Customer Due Dilligence is. While
this is required for all the customers including the existing and not just the new
customers.

Q.18What do you know about the Politically Exposed Persons, Specially

Designated Nationals And Financial Sanctions and, Why do you need to
check on them?
In place to check PEPs, SDNs and the HMT Financial Sanctions, it is
recommended by the 3rd European Money Laundering Directive to have a
procedure. A Politically Exposed Person, or someone who holds a prominent
public position, or an individual linked to them is known to be as a PEP. An
SDN is a Specially Designated National, on a list which specifies that US
Citizens dont have the permissio to conduct business with them. The HM
Treasury Financial Sanctions list specifies individuals with whom it is
prohibited to transfer or make funds available to.
Q.19 Name the software and/or applications are you proficient in.
To find an accounting firm these days where software isn’t at the cornerstone
of how they operate you’d be hard pressed. In the affair that you don’t have
experience with popular software, familiarize yourself with industry standards
ahead of time. To ensure that you are able to name popular applications, and
have a solid idea of their purpose you need to take some time out. "The bulk
of my experience lies with the x platform, but I'm pretty fascinated with some
of what the y system is capable of".
Q.20 If you collect passports and driving licences, Do you need to check
anything else?
A wider range of information can be checked by the EV, thus Providing a
more thorough knowledge of your client (KYC – Know Your Customer).
Besides, it can also enable you to check other data sets such as: PEPS and
Sanctions lists, which is advisable and specified by the 3rd European Money
Laundering Directive. As the fraudulent documentation are on the rise,
therefore, there is a need to refocus efforts on identifying them. In order to
remove the risk of receiving potentially fraudulent documents the Electronic
verification is designed; therefore you can have a greater level of confidence
in their authenticity. Various checks are carried out on the documents to
confirm as much as possible, thus reducing the risk of ID fraud.
Q.21Can you spot any difference between ‘small Accounts’ and Other
Accounts?
Yes. There are certain limitations associated with ‘Small Accounts’ such as: At
any point of time, the balance should not exceed Rs.50,000, in such accounts
in a year the total credits should not exceed Rs.1,00,000. Also, the total
withdrawal and transfers in a month should not exceed Rs.10,000 while the
biggest disadvantage over this type of account is that the foreign remittances
cannot be credited to such accounts. Initially for a period of twelve months
and thereafter such accounts remain operational, for a further period of twelve
months if within twelve months of the opening of such account the holder of
such an account provides evidence to the bank of having applied for any of
the officially valid documents.
Q.22 What if i don't possess any of the officially valid documnets to get
a bank Account, which isn't subjected to hold any limitations (as in the
case of small account) would It Be Possible?
Yes, By submitting a copy of any one of the valid documents as Proof of
Identity (PoI) a normal account can be openend. There are several valid ID
proofs that can be Provided such as: Identity card with the respective person’s
photograph issued by the Central/State Government Departments, Public
Sector Undertakings, Statutory/Regulatory Authorities, Scheduled Commercial
Banks, and Public Financial Institutions; (or) Stamp-paper/letter issued by a
gazetted officer, with a duly attested photograph of the person.

Why did you choose the banking as a career?

While I was in business school, I realized that my interest leaned towards

banking and finance. And since I believe that one should work in a capacity
where one is truly interested, I decided to take up this line of work.