How well do you know KYC and CDD in preventing financial crimes?

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Questions and Answers

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?

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?

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?

<p>To stay updated about the customer (D)</p> Signup and view all the answers

Flashcards

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?

Enhanced Customer Due Diligence (CDD) is necessary when suspicious activity or news reports raise red flags about a customer.

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?

Regular Customer Due Diligence helps businesses stay updated about their customers, ensuring ongoing compliance and risk management.

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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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Description

Test your knowledge on KYC and CDD, two essential processes used by banks and financial institutions to prevent financial crimes. Learn about the guidelines and recommendations from FATF and the Basel Committee on Banking Supervision, the role of the RBI in overseeing global standards in India, and the importance of regular reviews of customer information. Enhance your understanding of how KYC and CDD help prevent money laundering and terrorist financing, and how enhanced CDD can be carried out for high-risk individuals. Take this quiz