Banking Operations and Management
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Questions and Answers

What is the primary function of the General Banking Department?

  • To invest in stock markets
  • To provide direct customer service (correct)
  • To manage risk and capacity development
  • To handle loan and credit facilities

    • Why is capacity development crucial for general banking?

  • To comply with laws and procedures (correct)
  • To increase profitability
  • To minimize risks
  • To improve employee salaries

    • What is essential for senior management in general banking?

  • Knowledge of financial analytics
  • Knowledge of digital banking
  • Knowledge of human resources
  • Knowledge of risk management and capacity development (correct)

    • What is a key aspect of ensuring customer satisfaction in general banking?

    <p>Compliance with laws and procedures</p> Signup and view all the answers

    Why is it essential to have specialized people in general banking?

    <p>To facilitate general banking effectively</p> Signup and view all the answers

    What is the primary focus of chapter 10 in the manual?

    <p>Laws and Regulations Related to General Banking</p> Signup and view all the answers

    What is the banker's supreme responsibility?

    <p>To protect customers' deposit and secrecy</p> Signup and view all the answers

    What is a banker's relationship with their clients based on?

    <p>Trust and utmost good faith</p> Signup and view all the answers

    What is a banker's obligation towards customers?

    <p>To be impartial and non-discriminatory</p> Signup and view all the answers

    What is the significance of commercial banks in economic development?

    <p>They facilitate economic development</p> Signup and view all the answers

    What is a crucial concern for banks in general banking?

    <p>Fraud and money laundering</p> Signup and view all the answers

    What measures have been taken to handle the challenges of malpractices in general banking?

    <p>Implementing relevant legislative measures</p> Signup and view all the answers

    Why are banks considered more fragile than non-financial organizations?

    <p>Due to their perceived vulnerability to malpractices</p> Signup and view all the answers

    What could be a challenging task for banks in general banking?

    <p>Avoiding procedures and compliance requirements</p> Signup and view all the answers

    What is essential for banks to curb malpractices and fraudulent activities?

    <p>Adequate attention from policy makers</p> Signup and view all the answers

    Which Act is relevant to general banking and was enacted in 1991?

    <p>The Bank Companies Act</p> Signup and view all the answers

    Which section of the Contract Act, 1872, is relevant to general banking?

    <p>Some Important Sections</p> Signup and view all the answers

    What is the year of the Companies Act, which is relevant to general banking?

    <p>1994</p> Signup and view all the answers

    What is the primary focus of the Partnership Act, 1932, in relation to general banking?

    <p>Relevant issues</p> Signup and view all the answers

    What is the primary objective of laws and regulations in general banking?

    <p>To ensure compliance with banking laws</p> Signup and view all the answers

    What type of instruments are mainly discussed in Chapter 4?

    <p>Negotiable Instruments</p> Signup and view all the answers

    In which chapter is the Banker customer relationship discussed?

    <p>Chapter 2</p> Signup and view all the answers

    What is the main topic of Chapter 5?

    <p>Cash and Vault Management</p> Signup and view all the answers

    How many chapters are there in the manual?

    <p>12</p> Signup and view all the answers

    Where is the topic of Bills Collection and Remittance placed in the manual?

    <p>Chapter 6</p> Signup and view all the answers

    What is the primary role of commercial banks?

    <p>To mobilize capital to productive fields</p> Signup and view all the answers

    What do commercial banks provide to their customers?

    <p>Security and interest on deposits</p> Signup and view all the answers

    Why is it essential for bank employees to update their skills?

    <p>To adapt to evolving banking technology</p> Signup and view all the answers

    What is the significance of General Banking Department?

    <p>It is a vital part of financial institutions</p> Signup and view all the answers

    What is the current scenario of the banking industry?

    <p>Competitive and rapidly changing</p> Signup and view all the answers

    What is the primary purpose of CDD obligations on banks?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What should banks be able to demonstrate to their supervisory authority?

    <p>Their implementation of adequate CDD measures</p> Signup and view all the answers

    What is the focus of EDD measures?

    <p>Enhanced CDD measures in addition to normal CDD measures</p> Signup and view all the answers

    What is the significance of knowing the customer's type?

    <p>It helps in assessing the risk of money laundering and terrorist financing</p> Signup and view all the answers

    What is the purpose of transaction monitoring?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the underlying principle of CDD?

    <p>Every bank must know who their customers are</p> Signup and view all the answers

    What is the significance of MLPA, 2012 in CDD?

    <p>It includes predicate offences</p> Signup and view all the answers

    What is the purpose of CDD in relation to ATA, 2009?

    <p>To guard against the risk of committing offences under ATA, 2009</p> Signup and view all the answers

    What is the significance of business relationship in CDD?

    <p>It helps in assessing the risk of money laundering and terrorist financing</p> Signup and view all the answers

    What is the purpose of CDD in relation to banking products?

    <p>To assess the risk of money laundering and terrorist financing</p> Signup and view all the answers

    What should senior management possess in relation to risk management and capacity development in general banking?

    <p>Knowledge and skills on risk management and capacity development</p> Signup and view all the answers

    What is the primary role of the General Banking Department?

    <p>To provide direct customer services and manage deposits</p> Signup and view all the answers

    Why is capacity development crucial for general banking?

    <p>To improve efficiency and minimize risks</p> Signup and view all the answers

    What should banks prioritize in general banking operations?

    <p>Ensuring customer satisfaction with due compliance of laws and procedures</p> Signup and view all the answers

    What is the significance of having specialized people in general banking?

    <p>To improve the efficiency of general banking operations</p> Signup and view all the answers

    What is the primary objective of laws and regulations in general banking?

    <p>To prevent malpractices and fraudulent activities</p> Signup and view all the answers

    What measures have been taken to handle the challenges of malpractices in general banking?

    <p>Relevant legislative measures have been made and stringent compliance requirements have been increased</p> Signup and view all the answers

    Why is compliance with regulations crucial for banks in general banking?

    <p>Because compliance with regulations can help prevent malpractices and fraudulent activities</p> Signup and view all the answers

    What is the primary focus of legislative measures in relation to general banking?

    <p>To prevent malpractices and fraudulent activities</p> Signup and view all the answers

    What is the significance of strengthening compliance requirements in general banking?

    <p>It can help banks to prevent malpractices and fraudulent activities</p> Signup and view all the answers

    What is the primary focus of Chapter 10 in the manual?

    <p>Laws and Regulations Related to General Banking</p> Signup and view all the answers

    What is the significance of commercial banks in economic development?

    <p>They have a crucial role in the development process</p> Signup and view all the answers

    What is the nature of the relationship between banks and their clients?

    <p>Fiduciary</p> Signup and view all the answers

    What is the primary role of commercial banks?

    <p>To act as financial intermediaries</p> Signup and view all the answers

    What is the banker's supreme responsibility?

    <p>To protect customers' deposit and secrecy</p> Signup and view all the answers

    What act is relevant to general banking and was enacted in 1991?

    <p>The Bank Companies Act, 1991</p> Signup and view all the answers

    What is the primary focus of Chapter 10 in the manual?

    <p>Laws and Regulations Related to General Banking</p> Signup and view all the answers

    What is the purpose of laws and regulations in general banking?

    <p>To regulate and supervise banking activities</p> Signup and view all the answers

    Which Act is relevant to general banking and has some important sections?

    <p>The Contract Act, 1872</p> Signup and view all the answers

    What is the relevance of The Companies Act, 1994, in general banking?

    <p>It has some relevant issues for general banking</p> Signup and view all the answers

    What is the primary focus of the manual?

    <p>To cover general banking activities of banks</p> Signup and view all the answers

    How many chapters are there in the manual?

    <p>12 chapters</p> Signup and view all the answers

    What is the main topic of chapter 3 in the manual?

    <p>Opening and operations of different bank accounts</p> Signup and view all the answers

    Where is the topic of Bills Collection and Remittance placed in the manual?

    <p>Chapter 6</p> Signup and view all the answers

    What is the primary focus of the chapters in the manual?

    <p>To cover general banking activities of banks</p> Signup and view all the answers

    What do commercial banks provide to their customers?

    <p>Security and interest on deposits</p> Signup and view all the answers

    What is the primary objective of commercial banks in the economy?

    <p>To mobilize capital and activate the entire economic sector</p> Signup and view all the answers

    What is the current scenario of the banking industry?

    <p>Facing increasing competition and rapid transformation</p> Signup and view all the answers

    What is essential for today's bank employees?

    <p>To have specialized skills and knowledge</p> Signup and view all the answers

    Why is capacity development crucial for general banking?

    <p>To respond to rapid changes and evolving banking technologies</p> Signup and view all the answers

    What is the primary objective of CDD obligations on banks?

    <p>To make it more difficult to abuse the banking industry for money laundering or terrorist financing</p> Signup and view all the answers

    What is the significance of MLPA, 2012 in CDD?

    <p>It is a predicate offence under CDD</p> Signup and view all the answers

    What is the primary focus of EDD measures?

    <p>Conducting Enhanced CDD measures when necessary</p> Signup and view all the answers

    What is the significance of knowing the customer's type in CDD?

    <p>It is a risk-sensitive CDD measure</p> Signup and view all the answers

    What is the primary purpose of transaction monitoring?

    <p>To monitor transactions based on customer information</p> Signup and view all the answers

    What is the significance of business relationship in CDD?

    <p>It is a risk-sensitive CDD measure</p> Signup and view all the answers

    What should banks be able to demonstrate to their supervisory authority?

    <p>Their ability to implement adequate CDD measures</p> Signup and view all the answers

    What is the primary purpose of CDD in relation to ATA, 2009?

    <p>To guard against the risk of committing offences</p> Signup and view all the answers

    What is the significance of CDD in relation to banking products?

    <p>It is a risk-sensitive CDD measure</p> Signup and view all the answers

    What is the primary purpose of CDD in relation to MLPA, 2012?

    <p>To guard against the risk of committing predicate offences</p> Signup and view all the answers

    What is the primary objective of laws and regulations related to general banking?

    <p>To ensure the stability of the financial system</p> Signup and view all the answers

    What is the significance of stringent compliance requirements in general banking?

    <p>To prevent fraudulent activities and maintain integrity</p> Signup and view all the answers

    What is the primary concern of policy makers in general banking?

    <p>To address the challenges of malpractices and fraud</p> Signup and view all the answers

    What is the purpose of legislative measures in general banking?

    <p>To handle the challenges of malpractices and fraud</p> Signup and view all the answers

    What is the impact of non-compliance with procedures on banks?

    <p>It can be detrimental to the bank's reputation</p> Signup and view all the answers

    What is the primary purpose of the General Banking Department in a bank?

    <p>To provide direct customer service and manage deposits</p> Signup and view all the answers

    What is essential for senior management to possess in relation to general banking?

    <p>Skills in risk management and capacity development</p> Signup and view all the answers

    Why is capacity development crucial for general banking?

    <p>To minimize risks and improve credibility</p> Signup and view all the answers

    What is a crucial concern for banks in general banking?

    <p>Risk management and capacity development</p> Signup and view all the answers

    What is the significance of specialized people in general banking?

    <p>To minimize risks and improve credibility</p> Signup and view all the answers

    Which Act is relevant to general banking and was enacted in 1991?

    <p>The Bank Companies Act, 1991</p> Signup and view all the answers

    What is the primary focus of The Contract Act, 1872 in relation to general banking?

    <p>It defines the contractual relationship between banks and customers</p> Signup and view all the answers

    What is the primary purpose of The Companies Act, 1994 in relation to general banking?

    <p>It specifies the laws related to the formation and management of companies</p> Signup and view all the answers

    What is the primary focus of Chapter 10 in the manual?

    <p>Laws and Regulations related to General Banking</p> Signup and view all the answers

    Which Act is relevant to general banking and outlines the principles of partnership?

    <p>The Partnership Act, 1932</p> Signup and view all the answers

    What is the primary role of chapter 10 in the manual?

    <p>To cover laws and regulations related to general banking</p> Signup and view all the answers

    What is the significance of laws and regulations in general banking?

    <p>To provide a framework for risk management and control</p> Signup and view all the answers

    What is one of the key responsibilities of banks in relation to customers' information?

    <p>To protect customers' deposits and secrecy</p> Signup and view all the answers

    What is the primary objective of laws and regulations related to general banking?

    <p>To regulate the banking industry and prevent malpractices</p> Signup and view all the answers

    What is the significance of chapter 11 in the manual?

    <p>It addresses fraud, forgeries, and malpractices related to general banking</p> Signup and view all the answers

    What is the significance of commercial banks in economic development?

    <p>To mobilize capital to the productive fields to activate the entire economic sector</p> Signup and view all the answers

    What is the primary objective of laws and regulations in general banking?

    <p>To ensure the stability of the banking system</p> Signup and view all the answers

    Why is compliance with regulations crucial for banks in general banking?

    <p>To maintain public trust and confidence in the banking system</p> Signup and view all the answers

    What is the primary focus of EDD measures in relation to general banking?

    <p>To enhance customer due diligence</p> Signup and view all the answers

    Why is it essential for bank employees to update their skills in general banking?

    <p>To respond to changes in the banking industry</p> Signup and view all the answers

    What is the primary objective of the manual?

    <p>To provide an overview of general banking activities and laws</p> Signup and view all the answers

    How are the chapters in the manual organized?

    <p>Numerically, with a focus on general banking activities</p> Signup and view all the answers

    What is the primary focus of Chapter 4 in the manual?

    <p>Negotiable Instruments</p> Signup and view all the answers

    What is the primary focus of Chapter 6 in the manual?

    <p>Bills Collection and Remittance</p> Signup and view all the answers

    What is the scope of the manual in terms of general banking activities?

    <p>Broad, covering general banking activities and laws</p> Signup and view all the answers

    What is the primary purpose of the CDD obligations on banks under legislation and regulation?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the significance of knowing the customer's type in CDD?

    <p>To identify high-risk customers</p> Signup and view all the answers

    What is the purpose of transaction monitoring in CDD?

    <p>To detect fraudulent transactions</p> Signup and view all the answers

    What is the relevance of MLPA, 2012, in CDD?

    <p>It is an act related to money laundering and terrorist financing</p> Signup and view all the answers

    What is the purpose of Enhanced Due Diligence (EDD) measures?

    <p>To provide additional measures for high-risk customers</p> Signup and view all the answers

    What is the significance of the business relationship in CDD?

    <p>To identify potential risks</p> Signup and view all the answers

    What is the purpose of CDD obligations on banks under legislation and regulation?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the primary objective of laws and regulations related to general banking?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the significance of stringent compliance requirements in general banking?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the primary objective of CDD measures?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the primary purpose of the CDD obligations on banks under legislation and regulation?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the focus of Enhanced Due Diligence (EDD) measures?

    <p>To conduct additional checks on high-risk customers</p> Signup and view all the answers

    What is the relevance of MLPA, 2012, in CDD?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the primary objective of Customer Due Diligence (CDD) measures?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the significance of understanding customer type in CDD?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is a crucial concern for banks in general banking?

    <p>Money laundering</p> Signup and view all the answers

    What is the primary objective of legislative measures in relation to general banking?

    <p>To prevent fraudulent activities</p> Signup and view all the answers

    Why are stringent compliance requirements necessary in general banking?

    <p>To prevent money laundering and fraud</p> Signup and view all the answers

    What can be particularly detrimental to banks that are widely perceived to be more fragile than other non-financial organizations?

    <p>Malpractices</p> Signup and view all the answers

    What is a measure to handle the challenges of malpractices in general banking?

    <p>Relevant legislative measures</p> Signup and view all the answers

    What is the primary objective of a bank's Customer Awareness and Education Program?

    <p>To educate customers about fraud, forgery, and identity theft prevention</p> Signup and view all the answers

    What type of risks should banks continue to monitor?

    <p>Both offline risks and online threats such as hacking and phishing</p> Signup and view all the answers

    What type of message should banks publish or declare to customers?

    <p>Customer alert and precautionary messages on banking products and services</p> Signup and view all the answers

    Why is customer awareness important in the banking industry?

    <p>To reduce fraud, forgery, and identity theft</p> Signup and view all the answers

    What is the purpose of a bank's Customer Awareness Program?

    <p>To provide customers with knowledge and understanding of banking products and services</p> Signup and view all the answers

    What is the primary purpose of KYC procedures in banking?

    <p>To prevent money laundering, terrorist financing and other unlawful activities</p> Signup and view all the answers

    What should banks obtain from prospective customers to conduct effective KYC?

    <p>The identification documents that are most difficult to obtain illicitly</p> Signup and view all the answers

    What is the result of inadequate KYC programs in banks?

    <p>Significant legal and reputational risks</p> Signup and view all the answers

    Why is verification a cumulative process in KYC?

    <p>Because no single piece of identification can be fully guaranteed as genuine</p> Signup and view all the answers

    What contributes to the bank's overall safety and soundness?

    <p>Sound KYC policies and procedures</p> Signup and view all the answers

    What is the term for individuals who are or have been entrusted with prominent public functions by a foreign country?

    <p>Politically Exposed Persons (PEPs)</p> Signup and view all the answers

    Which of the following individuals must always be classified as PEPs?

    <p>All of the above</p> Signup and view all the answers

    What measures should banks apply to customers identified as PEPs?

    <p>Enhanced CDD measures</p> Signup and view all the answers

    What is the purpose of identifying customers as PEPs?

    <p>To apply enhanced CDD measures to prevent money laundering</p> Signup and view all the answers

    What is the significance of identifying PEPs in the context of money laundering prevention?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the primary purpose of the Money Laundering Prevention Act, 2012?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the relevance of the Money Laundering Prevention Act, 2012 in the context of general banking?

    <p>It outlines measures to prevent money laundering and terrorist financing</p> Signup and view all the answers

    Which Act is relevant to general banking and outlines measures to prevent money laundering and terrorist financing?

    <p>The Money Laundering Prevention Act, 2012</p> Signup and view all the answers

    What is the primary concern of the Money Laundering Prevention Act, 2012?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is one of the key objectives of the Money Laundering Prevention Act, 2012?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the significance of the Money Laundering Prevention Act, 2012 in general banking?

    <p>It outlines measures to prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the primary focus of the Money Laundering Prevention Act, 2012?

    <p>Preventing money laundering and terrorist financing</p> Signup and view all the answers

    What is the relevance of the Money Laundering Prevention Act, 2012 in the context of AML/CFT?

    <p>It outlines measures to prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the significance of the Money Laundering Prevention Act, 2012 in the context of banking regulations?

    <p>It outlines measures to prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the primary objective of the Money Laundering Prevention Act, 2012 in the context of general banking?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    In which of the following circumstances should a bank conduct Enhanced Due Diligence (EDD)?

    <p>For customers with high-risk profiles</p> Signup and view all the answers

    What is one of the Enhanced CDD measures?

    <p>Obtaining additional information on the customer</p> Signup and view all the answers

    What is the purpose of Enhanced Due Diligence (EDD)?

    <p>To reduce the risk of money laundering</p> Signup and view all the answers

    Who should be aware of the risk level of the customer?

    <p>All concerned bank officials</p> Signup and view all the answers

    What is one of the benefits of conducting Enhanced Due Diligence (EDD)?

    <p>Reducing the risk of money laundering</p> Signup and view all the answers

    What is the main concern of general banking?

    <p>Preventing fraud and money laundering</p> Signup and view all the answers

    What is the primary objective of legislative measures in general banking?

    <p>To prevent fraudulent activities</p> Signup and view all the answers

    What is the primary focus of measures to handle malpractices in general banking?

    <p>Preventing fraudulent activities</p> Signup and view all the answers

    What is a critical challenge in general banking?

    <p>Fraud and money laundering</p> Signup and view all the answers

    What is necessary to curb malpractices in general banking?

    <p>Stricter compliance requirements</p> Signup and view all the answers

    In which circumstances should a bank conduct Enhanced Due Diligence (EDD)?

    <p>When individuals are identified as politically exposed persons (PEPs)</p> Signup and view all the answers

    What is one of the Enhanced CDD measures?

    <p>Obtaining additional information on the customer's occupation</p> Signup and view all the answers

    What is the purpose of obtaining information on the source of funds or source of wealth of the customer?

    <p>To identify potential money laundering risks</p> Signup and view all the answers

    What is one of the main concerns that banks should continue to monitor?

    <p>All of the above</p> Signup and view all the answers

    What is the purpose of conducting regular monitoring of the business relationship?

    <p>To reduce the risk of money laundering and terrorist financing</p> Signup and view all the answers

    Why is it important to obtain the approval of senior management to commence or continue the business relationship?

    <p>To ensure compliance with regulations</p> Signup and view all the answers

    What is the purpose of the Customer Awareness and Education Program?

    <p>All of the above</p> Signup and view all the answers

    What is one of the activities that banks should perform as part of the Customer Awareness Program?

    <p>Publishing customer alert and precautionary messages</p> Signup and view all the answers

    Why is customer awareness important in preventing fraud and identity theft?

    <p>Because customer awareness is a key defense against fraud and identity theft</p> Signup and view all the answers

    What is the main objective of banks in terms of customer education?

    <p>To strengthen customers' knowledge and experience</p> Signup and view all the answers

    What is the primary purpose of CDD obligations on banks under legislation and regulation?

    <p>To make it more difficult to abuse the banking industry for money laundering or terrorist financing</p> Signup and view all the answers

    What is the significance of understanding customer type in CDD?

    <p>It is a risk-sensitive factor in CDD</p> Signup and view all the answers

    What is the primary objective of the Money Laundering Prevention Act, 2012?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the relevance of the Money Laundering Prevention Act, 2012 in the context of general banking?

    <p>It is relevant to preventing money laundering and terrorist financing</p> Signup and view all the answers

    Why should banks conduct Enhanced Due Diligence (EDD) measures?

    <p>When necessary</p> Signup and view all the answers

    What is the primary purpose of effective KYC standards in banking?

    <p>To protect the integrity of the banking system by reducing money laundering and other unlawful activities</p> Signup and view all the answers

    What should be obtained from the prospective customer to conduct an effective KYC?

    <p>The identification documents that are the most difficult to obtain illicitly</p> Signup and view all the answers

    What is the primary purpose of KYC procedures in banking?

    <p>To know the customer physically and financially</p> Signup and view all the answers

    What is the primary purpose of Enhanced Due Diligence (EDD) measures?

    <p>To apply to customers identified as PEPs</p> Signup and view all the answers

    Why is verification a cumulative process in KYC?

    <p>Because no single piece of identification can be fully guaranteed as genuine</p> Signup and view all the answers

    Who is considered a Politically Exposed Person (PEP)?

    <p>A senior government official, such as a Head of State</p> Signup and view all the answers

    What measures must banks take when identifying a customer as a Politically Exposed Person (PEP)?

    <p>Apply Enhanced Due Diligence (EDD) measures</p> Signup and view all the answers

    Which of the following is a characteristic of a Politically Exposed Person (PEP)?

    <p>They have been entrusted with a prominent public function</p> Signup and view all the answers

    Why is it important to identify Politically Exposed Persons (PEPs)?

    <p>To apply Enhanced Due Diligence (EDD) measures to prevent money laundering</p> Signup and view all the answers

    What is the primary concern related to Politically Exposed Persons (PEPs)?

    <p>Their potential involvement in money laundering</p> Signup and view all the answers

    What year was the Money Laundering Prevention Act enacted?

    <p>2012</p> Signup and view all the answers

    What is the main focus of the chapter related to the Money Laundering Prevention Act?

    <p>Relevant Issues of the Act</p> Signup and view all the answers

    What is the primary objective of the Money Laundering Prevention Act 2012?

    <p>To prevent money laundering</p> Signup and view all the answers

    In which chapter is the Money Laundering Prevention Act 2012 discussed?

    <p>Chapter 10</p> Signup and view all the answers

    What is related to the Anti-terrorism Act 2009?

    <p>Relevant Issues of the Act</p> Signup and view all the answers

    What is the significance of the Money Laundering Prevention Act 2012 in the context of general banking?

    <p>To strengthen compliance requirements</p> Signup and view all the answers

    What is the relevance of the Money Laundering Prevention Act 2012 in the context of general banking?

    <p>To prevent money laundering</p> Signup and view all the answers

    What is the primary focus of the chapter related to the Money Laundering Prevention Act 2012?

    <p>Relevant Issues of the Act</p> Signup and view all the answers

    What is the primary purpose of the Money Laundering Prevention Act 2012 in relation to general banking?

    <p>To prevent money laundering</p> Signup and view all the answers

    What is the significance of the Money Laundering Prevention Act 2012 in the context of general banking?

    <p>To strengthen compliance requirements</p> Signup and view all the answers

    What condition triggers the requirement for a bank to conduct Enhanced Due Diligence (EDD)?

    <p>Customers who are identified as Politically Exposed Persons (PEPs) or have high-risk scores</p> Signup and view all the answers

    What is one of the Enhanced CDD measures that a bank must take?

    <p>Obtaining additional information on the source of funds or source of wealth of the customer</p> Signup and view all the answers

    Why is it necessary for a bank to conduct regular monitoring of the business relationship?

    <p>To detect and prevent money laundering</p> Signup and view all the answers

    What is the primary purpose of Enhanced CDD measures?

    <p>To detect and prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the primary challenge that banks face in general banking?

    <p>Malpractices and fraudulent activities</p> Signup and view all the answers

    What is the purpose of making senior management aware of the risk level of the customer?

    <p>To obtain approval to commence or continue the business relationship</p> Signup and view all the answers

    What is the primary reason why banks are considered more fragile than non-financial organizations?

    <p>Due to the risk of money laundering and fraud</p> Signup and view all the answers

    What is the primary objective of the measures taken to handle the challenges of malpractices in general banking?

    <p>To prevent malpractices and fraudulent activities</p> Signup and view all the answers

    What is the primary concern of the legislative measures taken to handle the challenges of malpractices in general banking?

    <p>To prevent money laundering and fraud</p> Signup and view all the answers

    What is the primary benefit of implementing stringent compliance requirements in general banking?

    <p>To prevent malpractices and fraudulent activities</p> Signup and view all the answers

    What is the primary objective of the CDD obligations on banks under legislation and regulation?

    <p>To make it more difficult to abuse the banking industry for money laundering or terrorist financing</p> Signup and view all the answers

    What is the significance of understanding the type of customers in the context of CDD?

    <p>To understand the risk of money laundering and terrorist financing</p> Signup and view all the answers

    What is the purpose of conducting EDD measures in addition to normal CDD measures?

    <p>To reduce the risk of money laundering and terrorist financing</p> Signup and view all the answers

    What is the significance of transaction monitoring in the context of CDD?

    <p>To detect and report suspicious transactions</p> Signup and view all the answers

    What is the purpose of the Money Laundering Prevention Act 2012 (MLPA, 2012) in the context of CDD?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the primary objective of customer awareness and education programs in the context of banking?

    <p>To reduce fraud, forgery, and identity theft</p> Signup and view all the answers

    What type of messages should banks publish or declare to customers as part of their customer awareness program?

    <p>Customer alert and precautionary messages</p> Signup and view all the answers

    What is the primary benefit of customer awareness and education programs in the context of banking?

    <p>Reduced fraud, forgery, and identity theft</p> Signup and view all the answers

    Why is it essential for banks to monitor offline risks and online threats?

    <p>To reduce fraud, forgery, and identity theft</p> Signup and view all the answers

    What is the primary objective of banks' customer awareness programs in relation to loan and advances?

    <p>To provide customer alert and precautionary messages on loan and advances</p> Signup and view all the answers

    What is the primary benefit of sound KYC policies and procedures in banking?

    <p>To protect the integrity of the banking system and reduce money laundering</p> Signup and view all the answers

    What is the primary objective of verifying a customer's identity in KYC procedures?

    <p>To accumulate complete and accurate information about the customer</p> Signup and view all the answers

    Why is it essential to obtain identification documents from the prospective customer in KYC procedures?

    <p>Because they are the most difficult to obtain illicitly</p> Signup and view all the answers

    Who is considered a Politically Exposed Person (PEP)?

    <p>Individuals who are or have been entrusted with prominent public functions by a foreign country</p> Signup and view all the answers

    What is the result of inadequate KYC programs in banks?

    <p>Exposed to significant risks, especially legal and reputational risk</p> Signup and view all the answers

    What step should banks take after identifying a PEP among their customers?

    <p>Apply enhanced CDD measures</p> Signup and view all the answers

    What is the primary focus of KYC procedures in banking?

    <p>To know a customer physically and financially</p> Signup and view all the answers

    Which of the following is an example of a PEP?

    <p>Head of a state-owned enterprise</p> Signup and view all the answers

    Why is it important to identify PEPs?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the main purpose of enhanced CDD measures for PEPs?

    <p>To reduce the risk of money laundering and terrorist financing</p> Signup and view all the answers

    What is the primary objective of the Money Laundering Prevention Act, 2012 in the context of general banking?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    Which Act is relevant to general banking and outlines measures to prevent money laundering and terrorist financing?

    <p>The Money Laundering Prevention Act, 2012</p> Signup and view all the answers

    What is the relevance of the Money Laundering Prevention Act, 2012 in the context of AML/CFT?

    <p>It outlines measures to prevent money laundering and terrorist financing</p> Signup and view all the answers

    What type of risks should banks continue to monitor in relation to money laundering prevention?

    <p>Money laundering and terrorist financing risks</p> Signup and view all the answers

    What is the primary focus of EDD measures in the context of money laundering prevention?

    <p>To conduct enhanced due diligence on higher-risk customers</p> Signup and view all the answers

    What is the significance of business relationship in CDD in the context of money laundering prevention?

    <p>To understand the customer's business to assess the money laundering risks</p> Signup and view all the answers

    What is the primary purpose of obtaining information on the source of funds or source of wealth of the customer?

    <p>To assess the money laundering risks associated with the customer</p> Signup and view all the answers

    What is the primary focus of Chapter 10 in the manual in relation to money laundering prevention?

    <p>Money laundering prevention act, 2012</p> Signup and view all the answers

    What should banks prioritize in general banking operations to prevent money laundering?

    <p>Compliance with anti-money laundering regulations</p> Signup and view all the answers

    Why is capacity development crucial for general banking in relation to money laundering prevention?

    <p>To understand and comply with anti-money laundering regulations</p> Signup and view all the answers

    What is the primary purpose of a trust as defined in the Trust Act, 1882?

    <p>To benefit another or the owner</p> Signup and view all the answers

    What document should a banker thoroughly examine when opening an account in the names of persons in their capacity as trustees?

    <p>The Trust Deed</p> Signup and view all the answers

    What is the name of the person who accepts the confidence in a trust arrangement?

    <p>The trustee</p> Signup and view all the answers

    What is the term for the right of the beneficiary against the trustees as the owner of the trust property?

    <p>Beneficial interest</p> Signup and view all the answers

    What is the term for the instrument by which the trust is created?

    <p>Trust Deed</p> Signup and view all the answers

    What should be recorded on the Account Opening Form when a minor is admitted as partner?

    <p>The date of birth of the minor</p> Signup and view all the answers

    What happens if a minor fails to give notice after attaining majority?

    <p>They become a partner in the firm</p> Signup and view all the answers

    What is the consequence of no operation in an account for one year?

    <p>The account is transferred to 'DORMANT'</p> Signup and view all the answers

    Who should be consulted to determine the period within which a minor should elect to become a partner?

    <p>A lawyer</p> Signup and view all the answers

    What is required for the first withdrawal from a 'DORMANT' account?

    <p>Prior permission from the Manager / Sub-Manager</p> Signup and view all the answers

    Why cannot a minor have a solo account in a bank?

    <p>Because a contract with a minor is void</p> Signup and view all the answers

    What should be recorded on the Account Opening Form and Account Opening Register for a minor's account?

    <p>The date of birth and the date when the minor attains majority</p> Signup and view all the answers

    What should be examined before authorizing a legal guardian to open an account in the name of a minor?

    <p>The appointment order issued by Court in the guardian's name</p> Signup and view all the answers

    What is the purpose of verifying the documents provided by customers?

    <p>To verify the customer's identity and genuineness</p> Signup and view all the answers

    What type of certificate can be accepted as a document for customer identification?

    <p>All of the above</p> Signup and view all the answers

    What should happen to a minor's account when the minor attains majority?

    <p>The account should be closed and the balance should be transferred to a new account operated by the erstwhile minor</p> Signup and view all the answers

    Who can certify a customer's identity document?

    <p>All of the above</p> Signup and view all the answers

    What is the condition for opening an account for an illiterate person?

    <p>On proper introduction</p> Signup and view all the answers

    What is the purpose of interviewing customers during the account opening process?

    <p>To obtain additional information about the customer</p> Signup and view all the answers

    What type of account requires specific documents and operational procedures?

    <p>All of the above</p> Signup and view all the answers

    What documents are required for a partnership account?

    <p>Letter of partnership, Partnership deed, and Photographs of the applicant</p> Signup and view all the answers

    What type of deposit is SDS (Special Deposit Scheme)?

    <p>100% Term Deposit</p> Signup and view all the answers

    What is the significance of Section 35 of the Bank Company Act 1991?

    <p>It stipulates the maintenance of unclaimed deposit accounts</p> Signup and view all the answers

    What is the primary characteristic of SDS (Special Deposit Scheme)?

    <p>It allows withdrawal of principal amount after maturity</p> Signup and view all the answers

    What document is required from the heirs of a deceased account holder?

    <p>Affidavit or Notary Public</p> Signup and view all the answers

    What document is required for a Public Limited Company?

    <p>Certified true copy of Certificate of Commencement</p> Signup and view all the answers

    What is the loan facility against SDS (Special Deposit Scheme) receipts?

    <p>Loan with interest charged against the loan outstanding</p> Signup and view all the answers

    In which annexure is the detailed list of files and documents for maintenance of bank records placed?

    <p>Annexure-6</p> Signup and view all the answers

    What is the purpose of the instruction circular letter of the bank regarding procurement of fresh and renewal of corporate deposits?

    <p>To outline the procedures for procurement of fresh and renewal of corporate deposits</p> Signup and view all the answers

    What is the primary objective of the bank's guidelines for maintenance of unclaimed deposit accounts?

    <p>To comply with the Bank Company Act 1991</p> Signup and view all the answers

    What is the primary objective of the Code of Conduct in banking?

    <p>To develop a common perspective towards a mission and vision of the company</p> Signup and view all the answers

    What is the main focus of the Code of Conduct in banking?

    <p>Developing a sense of oneness among employees and customers</p> Signup and view all the answers

    What is the significance of the Code of Conduct in banking?

    <p>To act as an internal watchdog</p> Signup and view all the answers

    What are the five essential areas of the Code of Conduct in banking?

    <p>People, Product, Place, Promotion, and Price</p> Signup and view all the answers

    What is the primary purpose of the Code of Conduct in banking?

    <p>To create a sense of oneness among employees and customers</p> Signup and view all the answers

    What is the significance of the Code of Conduct in relation to customer satisfaction?

    <p>It helps to make customers happy</p> Signup and view all the answers

    What is the primary focus of the Code of Conduct in relation to employees?

    <p>Developing a sense of oneness among employees</p> Signup and view all the answers

    What is the role of the Code of Conduct in relation to stakeholders?

    <p>Creating a sense of oneness among stakeholders</p> Signup and view all the answers

    What is the primary objective of the Code of Conduct in relation to banking products?

    <p>Developing banking products or services</p> Signup and view all the answers

    What is the significance of the Code of Conduct in relation to the banking industry?

    <p>It creates a sense of professionalism among employees</p> Signup and view all the answers

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