Prevention of Money Laundering Act, 2002
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Questions and Answers

What does the Prevention of Money Laundering Act, 2002 require banking companies and financial institutions to do?

  • Offer high-interest savings accounts
  • Provide free financial advice to clients
  • Invest in risky ventures
  • Identify its clients and verify their identity (correct)

    • What information are banking companies and financial institutions required to obtain as per the Prevention of Money Laundering Act, 2002?

  • Information on clients' favorite hobbies
  • Information on clients' shoe sizes
  • Information on the purpose and intended nature of the business relationship (correct)
  • Information on clients' favorite colors

    • Under the Prevention of Money Laundering Act, 2002, what must intermediaries do when undertaking transactions?

  • Avoid asking for any client information
  • Identify clients and verify their identity (correct)
  • Provide loans without verifying client details
  • Allow anonymous transactions

    • Why do banking companies and financial institutions need to verify the identity of their clients?

    <p>To comply with legal regulations and prevent money laundering</p> Signup and view all the answers

    What is a key requirement for establishing a business relationship according to the Prevention of Money Laundering Act, 2002?

    <p>Obtaining information on the purpose and intended nature of the relationship</p> Signup and view all the answers

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