Company Law Quiz: Certification & Requirements

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What document is required to certify that a public limited company is entitled to commence business?

Certificate of Incorporation

CIN No.

Declaration of beneficial owners

Certificate of commencement of business (correct)

Which document is not required when a company is a private company?

Declaration of beneficial owners

CIN No.

Proof of Current Address

Certificate of Registrar of Joint Stock Companies (correct)

What does CIN No. stand for?

Company Incorporation Number

Corporate Information Number

Company Identification Number

Corporate Identification Number (correct)

What must a resolution passed by the Board of Directors include?

Specific bank account details Signup and view all the answers

When is a company not required to have a Certificate of Registrar of Joint Stock Companies?

When it is Limited by guarantee and has no share capital Signup and view all the answers

Which item must be signed by the authorized signatory?

Declaration of beneficial owners Signup and view all the answers

What is the purpose of maintaining a Minute Book for the company?

To document all formal resolutions passed by the Board Signup and view all the answers

What type of company does not require the Certificate of commencement of business regardless of its registration date?

Company Limited by guarantee Signup and view all the answers

What is the requirement for existing customers or beneficial owners that become PEPs?

They require approval to continue the business relationship. Signup and view all the answers

What does enhanced monitoring apply to in the case of PEPs?

Accounts where a PEP is the beneficial owner. Signup and view all the answers

Which category of individuals qualifies as a Politically Exposed Person (PEP)?

Individuals serving in key government or military positions. Signup and view all the answers

What specific procedure must be followed for non-face-to-face customers?

First payment must be through a KYC-complied account with another bank. Signup and view all the answers

How should client accounts opened by professional intermediaries be managed?

Branches may choose to hold pooled accounts managed by intermediaries. Signup and view all the answers

Why must branches ensure identification for clients when opened through professional intermediaries?

To comply with customer identification protocols. Signup and view all the answers

What is the primary concern regarding non-face-to-face customers?

They increase the risk of fraud and money laundering. Signup and view all the answers

What are the enhanced due diligence measures aimed at?

Mitigating the risks associated with high-risk customers. Signup and view all the answers

Who is responsible for knowing the customer when accounts are opened by professional intermediaries?

The Bank Signup and view all the answers

What documentation is necessary to examine when opening a bank account for an estate administrator?

Letter of Administration Signup and view all the answers

Which of the following is NOT a requirement for banks when dealing with intermediaries?

Conducting the CDD themselves Signup and view all the answers

What is sufficient for opening a Savings Bank account for a Self Help Group?

CDD of all office bearers Signup and view all the answers

In the context of trust/nominated or fiduciary accounts, who needs to be verified?

Trustees, settlers, beneficiaries, and signatories Signup and view all the answers

When might Customer Due Diligence (CDD) of all SHG members be required?

At the time of credit linking of SHGs Signup and view all the answers

What is the primary purpose of Customer Due Diligence (CDD) in banking?

To ensure compliance with banking regulations Signup and view all the answers

For an account operated by a fiduciary, which of the following is essential?

Confirming the purpose of the fiduciary's actions Signup and view all the answers

What level of management is responsible for the decision to open an account for a PEP?

Senior management Signup and view all the answers

What type of monitoring is required for accounts opened for PEPs?

Enhanced ongoing monitoring Signup and view all the answers

What must happen if an existing customer becomes a PEP?

Senior management approval is required to continue the relationship Signup and view all the answers

Who is considered a Politically Exposed Person (PEP)?

An individual with a prominent public position in a foreign country Signup and view all the answers

What is a guideline regarding the declaration of PEPs in the account opening form?

The PEP/relative field must be filled out completely Signup and view all the answers

What should branches avoid while gathering information from customers classified as PEPs?

Denying these customers banking services Signup and view all the answers

How are customers categorized as PEPs expected to receive service during account opening?

They should not face any inconvenience or denial of banking services Signup and view all the answers

Which is not a risk associated with accounts of PEPs?

Decreased potential for fraud Signup and view all the answers

What information must be included in the watermark on the captured live photograph of the customer?

CAF number, GPS coordinates, authorized official's name, unique employee code, and date and time stamp Signup and view all the answers

What is a requirement for capturing the live photograph of the customer?

The background should be of white color with no skew or tilt Signup and view all the answers

How should the live photograph of the original OVD be captured?

Vertically from above without skew or tilt Signup and view all the answers

What should be done if a quick response (QR) code is available on documents?

Auto populate the details by scanning the QR code instead of manual entry Signup and view all the answers

What action is taken after the completion of the process involving capturing photographs?

Send an OTP message requesting verification before sharing it Signup and view all the answers

What should be done if the customer does not have their own mobile number?

Utilize the mobile number of a family member or known person Signup and view all the answers

Which of the following statements is correct regarding the mobile number verification process?

The mobile number used must not belong to an authorized officer Signup and view all the answers

In what manner should the live photograph of the customer be illuminated?

Captured in proper light to ensure clarity and readability Signup and view all the answers

What is the minimum duration for which records of transactions between the RE and the customer must be maintained?

Five years Signup and view all the answers

Which of the following must be preserved for at least five years after the customer relationship ends?

Identification records Signup and view all the answers

What is the ultimate responsibility of the Bank concerning customer knowledge?

To conduct customer due diligence independently Signup and view all the answers

When can the identification records and transaction data be made available to competent authorities?

Upon request Signup and view all the answers

Which of the following is NOT required as part of maintaining transaction records according to PML Rule 3?

Total profit from transactions Signup and view all the answers

Which step must be taken to ensure quick retrieval of account information when requested?

Evolving a system for proper maintenance Signup and view all the answers

According to FATCA guidelines, for how long should transaction records be preserved?

Ten years Signup and view all the answers

Which of the following is a critical aspect to record for transaction reconstruction?

The currency used Signup and view all the answers

Study Notes

Role Guide Cum Certification Manual

This manual is for the Liability Central Processing Centre (LCPC)
It was updated on 31/03/2024
Role Based Certifications (RBCs) were introduced in 2018 to equip staff with knowledge and skills to face banking industry challenges.
The manuals, training, and evaluation methods have been updated in recent years.
These updates include the use of SharePoint for learners, videos, PPTs, quizzes, booklets, and self-learning tools.
Learning objectives and recap questions are included in chapters to improve comprehension and real-life application.

Foreword

The goal of the RBCs training programs is to provide staff with expertise to ensure better customer service.
The manual aims to provide insight into current roles, conceptual clarity, and ways to mitigate risks.
The manual helps staff succeed in their roles.

Index

The manual provides a detailed index with topics.
Topics include Savings Bank/Current Account opening, C-KYC Introduction, Non-Personalized Welcome Kits (NPWKs), Foreign Accounts Tax Compliance Act (FATCA) and Common Reporting Standards (CRS), Operational Due Diligence, Cyber Frauds and Prevention Strategies.

Chapter 1: Savings Bank /Current Account opening in a Branch

KYC Guidelines are to be implemented while opening accounts.
The KYC process for new accounts is now standardized through the C-KYC process.
Customer requests are handled via CRF-1 and CRF-2 forms.

Chapter 2: C-KYC Introduction

The Central KYC Registry is a centralized repository of KYC records.
This will reduce the burden of producing KYC documents and getting them verified.
KYC application can be accessed by authorized institutions.
The PMLA (Prevention of Money Laundering Act, 2002) mandates the filing of electronic KYC records with the Central KYC Registry within 3 days of commencing an account relationship.
The process allows for retrieval of KYC records online using KYC identifiers.

Chapter 3: Scrutiny of images and Physical AOF at LCPC

The LCPC staff need to be conversant with updated KYC guidelines.
Control measures are needed for image scrutiny of AOFs and record maintenance.
All employees need to be conversant with KYC guidelines, or a detailed screening exercise must be performed.
The LCPC staff need a system for checking physical account opening forms.

Chapter 4: Non-Personalized Welcome Kits (NPWKs)

Bank often issues NPWKs (Non-Personalized Welcome Kits) immediately upon account opening.
NPWKs carry the following: cheque books, INB kits, ATM cards, customer care contact details, and manuals.
The importance of NPWKs is the speed of service and decongestion.
Threshold limits exist at the branch level.
Undelivered kits and issues need proper handling.

Chapter 5: Foreign Accounts Tax Compliance Act (FATCA) and Common Reporting Standards (CRS)

FATCA is a US law for counteracting tax evasion by collecting information on accounts maintained by US residents elsewhere.
It facilitates the automatic exchange of information regarding US taxpayers.
CRS (Common Reporting Standard) is an international standard for the automatic exchange of financial account information.
Two account types exist: Individual and Entity.

Chapter 6: CYBER FRAUDS AND PREVENTION STRATEGIES

Cyber-attacks, ranging from denial-of-service to ransomware, are an ever-present risk.
There are three key pillars of information security: Confidentiality, Integrity, and Availability.
Prevention, detection, and response strategies are needed to combat cyber threats.
The importance of security measures, like strong passwords and multi-factor authentication is highlighted.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Test your knowledge on the essential documents and requirements for public and private limited companies. This quiz covers topics such as certification to commence business, Board of Directors resolutions, and regulations surrounding Politically Exposed Persons (PEPs). Prepare to deepen your understanding of company law principles!