Anti Money Laundering Interview Question

Anti Money Laundering Interview Questions

Anti Money Laundering Interview Questions

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.

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AML/KYC Interview Questions

AML/KYC Interview Questions

AML/KYC Interview Questions

Q.1 What does "pooled accounts" imply?

A pooled account is a fiduciary account in which numerous people' investments are pooled together.

 

Q.2 What are some parameters that can be used to improve due diligence?

Customer location, financial state, nature of business or transaction purpose are the parameters for enhanced due diligence.

 

Q.3What does KYC Policy imply?

In India, all banks are required to have a KYC policy, as mandated by the RBI. Customer Acceptance Policy, Customer Identification Procedures, Transaction Monitoring, and Risk Management are all listed in the KYC policy.

 

Q.4 Describe the AML/KYC Customer Acceptance Policy.

The customer acceptance policy outlines the procedures to be followed when a consumer opens an account. The policy lists the documents required for identification as well as other required client characteristics.

 

Q.5Explain the AML/KYC client identification procedure.

The Client identification procedure is the process of identifying a customer using documents and other available information in order to comply with government-mandated AML/KYC rules.

 

Q.6How will you recognise transactions that are suspicious?

Observation, study of Exception Reports, and the use of AML Software can all be used to spot suspicious transactions.

 

Q.7What can cause a transaction to be considered suspicious?

There are a variety of reasons for a transaction to seem suspicious, including false identity, incorrect address, or doubt about the account's true recipient.

 

Q.8What does "name screening" imply?

Name screening is used to see if any of the institution's customers are on any blacklists or regulatory lists.

 

Q.9Who can be considered a customer for KYC purposes?

A customer is an individual or a business that maintains an account, forms a relationship, or has an account managed on their behalf or is a beneficiary of accounts kept by intermediaries.

 

Q.10When do employees receive induction training?

Employees receive induction training when they begin working for the company. Induction training is required.

is a type of orientation for new employees to enable them to perform their duties in a new profession or job role within a company (or establishment).

 

Q.11What does the BR Act of 1949 contain?

It includes AML/KYC policies.

 

 Q.12 What does CTR stand  for?

According to the PMLA, a cash transaction report is required.

It's also known as a currency transaction report.

 

Q.13What what do you mean when you say "money laundering"?

Money laundering is the concealment of the source of funds received by illegal means such as gambling, corruption, extortion, drug trafficking, and human trafficking. Money is moved around the financial system repeatedly in such a way that its source is obscured. It's the process of cleaning up dirty money.

 

Q.14Please take a look at the KYC procedure listed below. Determine which KYC aspect is the most effective.

corresponds to the practise that has been stated. The creation of a robust information base about each consumer is made possible by effective information-gathering tactics. This is known as

Identification of the customer, It entails effective information-gathering tactics that allow for the creation of a robust data base about each customer. Banks must spell out the Customer Identification Procedure to be followed at various stages, such as when establishing a banking relationship, conducting a financial transaction, or when the bank has doubts about the authenticity, veracity, or adequacy of previously obtained customer identification data.

 

Q.15What are the KYC objectives?

The goals of KYC are to ensure proper customer identity and to monitor questionable transactions.

What are the phases of money laundering?

 

Q.16 What are the stages of money laundering?

Integration, Layering, and Placement are the three stages of money laundering.

 

Q.17Why do Anti-Money Laundering Checks need to be done?

Since the Proceeds of Crime Act, the Serious Organized Crime and Police Act, the Terrorist Act, and the Money Laundering Requirements control the AML regulations. Failure to report suspicious activities might result in a criminal charge as well as hefty fines from the regulating agency.

 

Q.18Will you still need to conduct customer due diligence if you've been dealing with my clients for a long time?

We need to make sure that our customers are paid on time.

all clients' due diligence is up to date We would need sufficient documentary ID details on the files, but if their circumstances or risk profile have changed since then, we should update the customer due diligence.

 

Q.19Can you explain what money laundering and financial terrorism are?

Money laundering is the process of converting illegally obtained funds into funds that appear to have come from a legitimate source. Money laundering is used by money launderers all over the world to hide illicit behaviour such as drug trafficking, terrorism, and extortion.

 

Q.20What is a Know Your Customer (KYC) Policy?

All banks are expected to create a KYC Policy with the consent of their respective boards, according to RBI instructions published vide. The following are the components of the KYC Policy: 1. Customer Acceptance Policy is a critical component. 2. Procedures for identifying customers 3. Transactions Monitoring 4. Management of risk.

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AML Interview Questions

AML Interview Questions

AML Interview Questions

1.What Is Money Laundering, Exactly?

Money laundering is the practise of criminals attempting to make criminal proceeds appear lawful by concealing their criminal origins. Three procedures are used to do this:

Placement is the process of putting the proceeds of crime where they belong.

Layering - Using 'layers' of transactions to conceal the proceeds of illicit activity.

Integration - Constructing a plausible justification for the proceeds

 

2. Who Is Responsible For Anti-Money Laundering Checks?

Solicitors, accountants, tax advisors, insolvency practitioners, financial institutions, credit institutions, estate agents, chartered surveyors, trust/service providers, gaming companies, and high-value dealers with a potential business relationship worth more than 15,000 Euros, such as automobile dealers and jewellers.

 

3.Why Do Anti-Money Laundering Checks Need to Be Done?

The Proceeds of Crime Act, the Serious Organized Crime and Police Act, the Terrorist Act, and the Money Laundering Rules are the four acts that control anti-money laundering regulations. Failure to disclose suspicious conduct might result in a criminal charge as well as hefty fines from the appropriate regulatory agency.

 

4. I've been dealing with my clients for a long time; do I still need to conduct customer due diligence?

You must keep CDD current for all of your clients. You may have appropriate documented ID facts on your files, but if their circumstances or risk profile have changed since then, you should update your CDD. It's true. It is recommended that clients' CDD be reviewed on a regular basis.

 

5. Who Is In Charge Of Enforcing Anti-Money Laundering Laws?

A variety of regulatory entities police the AML legislation. The JMLSG (Joint Money Laundering Steering Group) establishes guidelines that are enforced by the FCA/PRA (Financial Conduct Authority/ Prudential Regulation Authority), the SRA (Solicitors Regulation Authority in England), the OFT (Office of Fair Trading), HMRC (HM Revenue & Customs), ICAEW (Institute of Chartered Accountants in England & Wales, plus other Accountancy bodies), RICS (Royal Institute of

 

6. What Is Electronic Verification and How Does It Work?

It is critical to authenticate individuals doing financial transactions in order to prevent fraud and money laundering. Documentary proof was previously used to prove a person's identity. These aren't always available, and they're easily fabricated or altered.

As a result, computerised verification adds security and lowers the danger of money laundering and fraud.

Electronic verification eliminates the need for the customer to be there, saving time and assisting in the development of customer relationships. Money laundering risk is lessened since several data sources are used to authenticate the consumer rather than relying just on documentation evidence.

 

7. Why do I need to check anything else if I collect passports and driver's licences?

EV may verify a broader range of data, giving you a better understanding of your customer (KYC – Know Your Customer). It can also be used to examine other data sets such as PEPS and Sanctions lists, as recommended and required by the 3rd European Money Laundering Directive.

With the prevalence of forged documents on the rise, efforts to identify them must be refocused. Electronic verification is intended to eliminate the possibility of receiving possibly counterfeit documents, allowing you to have greater trust in their authenticity. Various checks are performed on the documents in order to confirm as much as possible, hence lowering the risk of fraud. 

 

8. Online Systems Are Expensive; What If I Can't Afford Them?

Taking paper papers comes with a lot of hidden fees that aren't always obvious. When working with a client over the phone, for example, sending vital documents through recorded delivery to ensure they don't get lost comes at a cost that is often more than the cost of an electronic search. If the documents are lost, the cost of replacing them for your potential client will be incurred. This may be a more time-consuming operation, but by conducting a short electronic search, may more searches be conducted, resulting in an increase in the number of clients onboarded?

 

9: Why Are You Allowing Me To View Private Data?

The information in electronic systems has been given permission to be used in these systems. The Full Electoral Roll can be used for an AML check, and this is covered by the Representation of the People Act (2002). When a Credit Reference Agency (CRA) uses financial records to conduct an AML check, it does not reveal any financial information other than what is required to identify someone.

 

10: What Are Politically Exposed Persons (PEPs), Specially Designated Nationals (SDNs), and Financial Sanctions, and Why Do I Need To Check Them?

The 3rd European Money Laundering Directive recommends establishing a mechanism for checking PEPs, SDNs, and HMT Financial Sanctions.  A PEP is a Politically Exposed Person, or someone associated with someone who holds a prominent public position. 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.

 

11. What Is The Difference Between Money Laundering And Financial Terrorism?

Money laundering is the process of converting illegally obtained funds into funds that appear to have come from a legitimate source. Money laundering is used by money launderers all over the world to hide illicit behaviour such as drug/arms trafficking, terrorism, and extortion.

Financial terrorism is defined as financial support for acts of terrorism in any form or for those who encourage, plan, or carry out acts of terrorism.

Money launderers transport illegal monies through legal means to hide their criminal origins, whereas those who finance terrorists transfer cash that may be legal or unlawful in origin in order to hide their source and ultimate use, which is to support Financial Terrorism.

 

12.What Is Kyc, and What Does It Mean?

KYC stands for "Know Your Customer," a word that refers to the process of identifying a customer. It entails making reasonable efforts to determine the genuine identity and beneficial ownership of accounts, the source of funds, the nature of the customer's business, the rationality of account activities in connection to the customer's business, and other factors that aid banks in risk management.

The goal of the KYC guidelines is to prevent banks from being used for money laundering by criminal elements, whether purposefully or unintentionally.

 

13.What Is Kyc Policy, and What Does It Mean?

All banks are expected to create a KYC Policy with the consent of their respective boards, according to RBI instructions released via their circular of November 29, 2004. The KYC Policy is made up of the following components: 

Customer Acceptance Policy
Customer Identification Procedures
Monitoring of Transactions
Risk Management.

 

14. What Exactly Is A Customer?

A "client" may be defined as follows for the purposes of KYC policy:

A person or entity with whom the bank keeps an account and/or has a business connection;

The beneficial owner is the person on whose behalf the account is managed.

Beneficiaries of transactions facilitated by professional intermediaries such as Stock Brokers, Chartered Accountants, Solicitors, and others as permitted by law

Any person or entity involved in a financial transaction that potentially expose the bank to severe reputational or other risks, such as a wire transfer or a single high-value demand draught issue.

 

15. What Is A Customer Acceptance Policy, And What Does It Mean?

The general standards followed by banks when enabling customers to open accounts with them are referred to as the Customer Acceptance Policy. In general, the standards state that no accounts should be formed in false or anonymous names, or where the customer's identification matches that of a person with a criminal record or a banned company. Similarly, accounts should not be opened if the bank is unable to verify the identity of the customer and/or receive the necessary documentation in accordance with the bank's policies.

 

16. What Is The Procedure For Customer Identification?

Customer identification is the process of identifying and verifying a customer's identity using credible and independent papers, data, and information. Banks would have to show the competent authorities that due diligence was followed in their operations. in compliance with existing legal and regulatory requirements

 

17. When Does Kyc Make an Application?

KYC will be conducted for the following purposes, but not limited to:

Make a new account.

(borrowal/deposit)
Opening a second account where current KYC documents were not presented when the first account was opened.
Opening a locker facility where these documents are not available for all locker facility users at the bank.
When the bank believes that extra information from existing clients is required based on the account's performance.
In accordance with RBI directions, at regular intervals.
When signatures, mandate holders, beneficial owners, and other details change.

 

18. What Do Aml/cft Supervisors Want to See

The AML/CFT supervisors are looking to see if the reporting entity has a risk assessment that is acceptable and reasonable, as well as an AML/CFT programme that reflects and controls those risks. AML/CFT supervisors use a risk-based approach to supervision, choosing from a variety of supervision and enforcement methods. The nature of the business and the risks that each reporting entity manages will be taken into account during supervision. For more details on the Reserve Bank's approach to AML/CFT oversight, read our Bulletin article or speech.

 

19. What Is Peps?

Individuals who are "politically exposed" (PEPs) are those who are vulnerable to corruption because of their position in public life. This idea is currently limited to overseas PEPs in New Zealand law, and does not include domestic (New Zealand-based) PEPs. The dangers associated with PEPs must be taken into account by reporting bodies, and they should:

get senior management approval for establishing or maintaining commercial connections with PEPs; take reasonable measures to ascertain the source of wealth and source of funding of PEPs; and conduct improved, continuing monitoring of the business relationship

 

20.What Is Ongoing Customer Due Diligence?

Ongoing Client Due Diligence entails analysing customer information on a regular basis and having procedures in place to monitor accounts. All clients, including previous ones, are compelled to do so.

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