Real Time Case Scenario of Due Diligence in Anti Money...Read More
Q. 1 Can you explain what you mean by Customer Identification Procedure?
Customer identification is the process of identifying and verifying a customer's identity using trustworthy and independent papers, data, and information. In such an event, banks would have to demonstrate to the appropriate authorities that due diligence was carried out in compliance with existing rules and regulations.
Q. 2 What Does It Mean To Be A Customer?
If the KYC Policy is our primary goal, then a customer can be described as someone who maintains his or her account and/or has a commercial relationship with the bank; or the person on whose behalf the account is kept (i.e. the beneficial owner). Beneficiaries of transactions facilitated by professional intermediaries such as Chartered Accountants, Stock Brokers, Solicitors, and others as permitted by law, and any other individual. who is involved in a financial transaction that may expose the bank to reputational or other risks, such as a wire transfer or the issuance of a high-value demand draught in a single transaction?
Q. 3 Under what circumstances should KYC be used?
Under what circumstances should KYC be used? There are several conditions that KYC applies to, but they do not include: The deposit/borrowal account type is selected when a new account is created. At the time of opening a second account, if current KYC documents were not presented at the time of opening the previous account. When a locker facility first opens, these documents may not be available at the bank for all locker facility users. When the bank believes it is important to gather extra information from existing clients based on the account's performance. Following the RBI's instructions, at regular intervals. Also, if any signatories, mandate holders, beneficial owners, or other details change.
Q. 4 What Is A Customer Acceptance Policy?
Customer Acceptance Policy refers to the broad guidelines followed by banks when allowing customers to open accounts with them. In general, the standards state that no accounts should be formed in anonymous or hypothetical names, or where the customer's identification matches that of a person with a known criminal history or a banned company. Similarly, accounts should not be opened if the bank is not in a position to verify the identity of the account holder and/or receive the papers necessary by the bank's policy.
Q. 5 What unit are the Supervisors of Aml/cft looking for?
The AML/CFT supervisors are in charge of determining whether or not the insurance company has a reasonable risk assessment and an AML/CFT program that recognizes and controls those risks. AML/CFT supervisors employ a risk-based approach to supervision, selecting from a variety of monitoring and social control methods available in the United States. Supervising can take into account the nature of the business as well as the risks that each covering entity is responsible for. For more information on the Reserve Bank's approach to AML/CFT supervision, see our Bulletin article or speech.
Q.26 What does Continuous Customer Due Diligence entail?
Ongoing Client Due Diligence entails evaluating customer information regularly and having procedures in place to undertake account monitoring. While this is true, is required for all clients, both existing and new ones.
Q.27How familiar are you with Politically Exposed Persons, Specially Designated Nationals, and Financial Sanctions, and why do you need to keep an eye on them?
The 3rd European Money Laundering Directive recommends having a mechanism in place to examine PEPs, SDNs, and HMT Financial Sanctions. A PEP is a Politically Exposed Person (PEP), who is someone who holds a significant public position or is associated with them. A Specially Designated National (SDN) is someone who is on a list of people who are not allowed to do business with US citizens. Individuals with whom it is illegal to transmit or make monies available are listed on the HM Treasury Financial Sanctions list.
Q. 8 What software and/or apps do you use?
You'd be hard pushed to find an accounting firm these days that doesn't use software to run their business. If you haven't worked with popular software before, familiarise yourself with industry standards ahead of time. You should set aside some time to guarantee that you can name common applications and understand their purpose. "I have the most of my experience with the x platform, but I'm intrigued by some of the capabilities of the y system."
Q. 9 Do you need to check anything else if you collect passports and driver's licenses?
The EV can verify a broader range of data, giving you a better understanding of your client (KYC – Know Your Customer). Furthermore, it can be used to examine other data sets such as PEPS and Sanctions lists, as recommended and required by the 3rd European Money Laundering Directive. As the number of fake documents increases, it is necessary to refocus efforts on identifying them. Electronic verification was created to eliminate the risk of obtaining possibly fake documents, allowing you to have greater trust in their authenticity. The documents are subjected to several inspections to ensure that they are genuine.
Q.10 Is there a distinction between small Accounts' and 'Other Accounts'?
Yes. There are some restrictions associated with 'Small Accounts,' such as the following: the balance in such accounts should not exceed Rs.50,000 at any moment, and the total credits in such accounts in a year should not exceed Rs.1,000,000. The total withdrawals and transfers in a month should not exceed Rs.10,000, and the most significant disadvantage of this type of account is that overseas remittances cannot be credited to it. Initially for twelve months, and thereafter for a further twelve months if the holder of such an account produces evidence to the bank of having applied for any type of loan within twelve months of the account's establishment.
Q. 11 Would it be possible if I didn't have any of the legally required documents to open a bank account that isn't subject to any restrictions (like in the case of a modest account)?
Yes, A standard account can be opened by submitting a copy of any of the valid papers as Proof of Identity (PoI). Identity cards with the respective person's photograph issued by 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 are all valid ID proofs.
Q. 12 What is the PMLA Act?
The PMLA Act, also known as the Prevention of Money Laundering Act (PMLA), is an anti-money laundering law passed by the Indian government in 2002.
Q.13What crimes are covered by AML-KYC and their proceeds are verified?
Drug trafficking, kidnapping, extortion, murder, corruption, immoral trafficking of women and children, and waging a war against the state are all covered.
Q.14Anti-money laundering checks are carried out by
Professionals representing clients, institutions, banks, or financial institution workers involved in account opening or acceptance of funds conduct anti-money laundering checks. Tax experts, solicitors, accountants, real estate agents, and other professionals are included.
Q. 15 What are the benefits of anti-money laundering checks?
Anti-money laundering must be carried out by the law, and strict adherence to the law is required. Any noncompliance will result in not just a monetary penalty, but potentially a criminal charge or the institution's liquidation. Anti-money laundering legislation has been enacted by governments all over the world.
Q.16Does the financial institution needs to conduct customer due diligence on existing customers?
Yes, all clients' customer due diligence should be current. Any changes in a client's profile should be recorded in the customer due diligence process, which should be done regularly.
Q.17Isnot it true that anti-money laundering legislation and regulations are required by law?
Financial authority mandated by the government, lists and enforces anti-money laundering laws and regulations. The laws and regulations also comply as well as international conventions on the subject.
Q.18 Explain electronic verification in the context of anti-money laundering and anti-terrorism financing.
The term "electronic verification" refers to the electronic comparison of client records with databases maintained by the government or organizations. It is more reliable than physical or recorded evidence. It also saves time for the customer because no physical verification is required.
Q.19Are there any documents other than passports and driver's licenses required for a customer's CDD or KYC?
Fraudulent documentation is difficult to recognize due to advances in forging techniques, therefore you should have supporting documents in addition to the customer's passport and driver's license. It is also possible to use electronic verification, which is more reliable.
Q. 20 In AML/KYC, what do you mean by PEP?
PEP stands for Politically Exposed Persons, and it refers to those who are well-known and hold public or political positions but are prone to corruption.
Q.21In AML/KYC, what is SDN?
SDN now includes Specially Designated Nationals (SDNs) who do not do business with US citizens.
Q.22 Describe Financial Terrorism in your own words.
The provisioning of financial resources for terrorist activities or individuals involved in terrorist actions is referred to as financial terrorism.
Q.23What does the term "placement" mean in the context of money laundering?
Money launderers use the term "placement" to describe the act of depositing money obtained through illicit means into a legitimate financial institution.
Q.24Explain the concept of money laundering layering.
In money laundering, layering refers to the process of passing tainted money that has been 'placed' via many transactions.
Q.25 Describe how money laundering is integrated.
Integration in money laundering refers to putting money into legitimate-looking forms, such as stock/government bonds/business assets, to provide the appearance of legality.
Q.26Does BASEL cover Anti-Money Laundering/Know Your Customer (AML/KYC)?
Customer Identification, Compliance with Laws, Cooperation with Law Enforcement Agencies, and Adherence to the Statement are all BASEL money laundering principles (i.e. the declaration made on Anti-money laundering)
Q.27Which international institution is responsible for fostering worldwide cooperation in the fight against terrorist financing and money laundering?
The Financial Action Task Force (FATF) strives to promote international collaboration in the fight against terrorist financing and money laundering.
Q.28In AML-KYC, what is CTR?
CTR stands for cash transaction reports and is a report that lists all cash transactions over Rs. 10 lakh.
Q.29Describe CCR in the context of AML-KYC.
The term "counterfeit currency report" refers to a report that identifies all cash transactions made with forged or counterfeit Indian currency notes.
Q.30Explain STR in the context of AML-KYC.
STR stands for suspicious transaction report, and it lists suspicions or anomalous transactions, as well as the reasons for them.
Obtain industry-recognized accreditation.
Real Time Case Scenario of Due Diligence in Anti Money...Read More
Real Time Case Scenario of Transaction Monitoring in Anti Money...Read More
To request a quote or want to meet up for a course discussion, contact us directly or fill out the form and we will get back to you promptly.