Podcast
Questions and Answers
Which organizations provide recommendations for the guidelines on KYC and CDD?
Which organizations provide recommendations for the guidelines on KYC and CDD?
- FATF and the Basel Committee on Banking Supervision (correct)
- The United Nations and OECD
- The International Chamber of Commerce and WTO
- The World Bank and IMF
When is enhanced CDD warranted?
When is enhanced CDD warranted?
- At the beginning of a new business relationship
- At regular intervals during the relationship
- When the customer executes numerous cash transactions
- When suspicious activity or news reportage raises a red flag (correct)
What is the purpose of carrying out enhanced CDD?
What is the purpose of carrying out enhanced CDD?
- To assess the customer lifecycle
- To prevent terrorist financing and money laundering (correct)
- To verify the identity of low-risk individuals
- To analyze the risk of regular customers
What is the purpose of carrying out Customer Due Diligence at regular intervals?
What is the purpose of carrying out Customer Due Diligence at regular intervals?
Flashcards
Who sets KYC/CDD guidelines?
Who sets KYC/CDD guidelines?
The Financial Action Task Force on Money Laundering (FATF) and the Basel Committee on Banking Supervision provide recommendations for KYC and CDD guidelines.
When is enhanced CDD needed?
When is enhanced CDD needed?
Enhanced Customer Due Diligence (CDD) is necessary when suspicious activity or news reports raise red flags about a customer.
Why is Enhanced CDD important?
Why is Enhanced CDD important?
The purpose of Enhanced Customer Due Diligence is to prevent money laundering and terrorist financing.
Why is regular CDD important?
Why is regular CDD important?
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Study Notes
- Banks and financial institutions must verify the identity of anyone they work with to prevent financial crimes.
- KYC (Know Your Customer) and CDD (Customer Due Diligence) are processes used to verify customer identities.
- CDD is an integral part of KYC.
- KYC and CDD involve analyzing the customer lifecycle and assessing risk.
- The guidelines for KYC and CDD are based on recommendations from FATF and the Basel Committee on Banking Supervision.
- The RBI oversees changes to global standards in India.
- Banks must have a policy framework on KYC and AML measures.
- KYC and CDD help prevent money laundering and terrorist financing.
- Enhanced CDD can be carried out for high-risk individuals.
- Regular reviews of customer information are necessary.
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