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RBI KYC Guidelines MCQs - 67 Most Expected Questions ⏳ Updated: Jan 2026 | 🎯 67 MCQs
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Consider the following statements:
Assertion
Assertion
Explanation:
Correct: A
India's commitment to protecting the integrity of the international financial system is linked to its status as a member of the Financial Action Task Force (FATF), which sets global standards for these measures. Understanding international bodies is key to mastering RBI KYC Guidelines MCQs.
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What two pieces of legislation form the primary legal framework for Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) in India?
Explanation:
Correct: B
The legal framework in India for AML and CFT is formed by The Prevention of Money-Laundering Act, 2002, and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005. This statutory knowledge is essential for solving RBI KYC Guidelines MCQs.
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Which of the following statements regarding the compliance requirements for foreign branches/subsidiaries of Indian Regulated Entities (REs) are correct?
If KYC/AML standards vary between the RBI and the host country, the branch must adopt the more stringent of the two regulations.
The rule requiring the adoption of the "more stringent" regulation does not apply to accounts designated as 'small accounts'.
If host country laws prohibit the implementation of specific RBI KYC/AML guidelines, the matter must be brought to the notice of the Reserve Bank of India.
If KYC/AML standards vary between the RBI and the host country, the branch must adopt the more stringent of the two regulations.
The rule requiring the adoption of the "more stringent" regulation does not apply to accounts designated as 'small accounts'.
If host country laws prohibit the implementation of specific RBI KYC/AML guidelines, the matter must be brought to the notice of the Reserve Bank of India.
Explanation:
Correct: D
All three statements are correct. Foreign branches/subsidiaries of REs must follow the stricter of RBI or host country rules. An exception to this "more stringent" rule exists for 'small accounts'. This ensures robust Anti-Money Laundering (AML) compliance across borders, a frequent topic in RBI KYC Guidelines MCQs.
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Which of the following statements regarding the identification of a "Beneficial Owner" (BO) are correct?
For a company, "Controlling ownership interest" is defined as ownership of or entitlement to more than 10 percent of the shares, capital, or profits.
For a partnership firm, a BO is a natural person with ownership of or entitlement to more than 10 percent of the capital or profits.
"Control" includes the right to appoint a majority of the directors or to control management or policy decisions, such as through shareholding or voting agreements.
The threshold for "Controlling ownership interest" in an unincorporated association or body of individuals is more than 25 percent.
For a company, "Controlling ownership interest" is defined as ownership of or entitlement to more than 10 percent of the shares, capital, or profits.
For a partnership firm, a BO is a natural person with ownership of or entitlement to more than 10 percent of the capital or profits.
"Control" includes the right to appoint a majority of the directors or to control management or policy decisions, such as through shareholding or voting agreements.
The threshold for "Controlling ownership interest" in an unincorporated association or body of individuals is more than 25 percent.
Explanation:
Correct: A
Statements 1, 2, and 3 are correct definitions for identifying a Beneficial Owner. Statement 1 defines the >10% threshold for companies. Statement 4 is incorrect; the threshold for an unincorporated association or body of individuals is more than 15 percent, not 25. Memorizing these percentages is vital for RBI KYC Guidelines MCQs.
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Which of the following statements regarding "Officially Valid Documents" (OVDs) are correct?
The Permanent Account Number (PAN) card is not listed as a primary "Officially Valid Document" (OVD).
A job card issued by NREGA, duly signed by an officer of the State Government, is considered an OVD.
A utility bill, not more than two months old, can be deemed an OVD for the limited purpose of proof of address, but only if the OVD furnished by the customer does not have an updated address.
The Permanent Account Number (PAN) card is not listed as a primary "Officially Valid Document" (OVD).
A job card issued by NREGA, duly signed by an officer of the State Government, is considered an OVD.
A utility bill, not more than two months old, can be deemed an OVD for the limited purpose of proof of address, but only if the OVD furnished by the customer does not have an updated address.
Explanation:
Correct: D
All three statements are correct. The list of primary OVDs includes the passport, driving licence, Aadhaar, Voter's ID, and NREGA job card; it does not include the PAN card. Knowing which documents qualify is a common trap in RBI KYC Guidelines MCQs.
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When identifying the beneficial owner(s) for a trust,
which of the following parties must be identified?
which of the following parties must be identified?
Explanation:
Correct: C
For a trust, the identification of beneficial owner(s) includes the author of the trust, the trustee, beneficiaries with 10 percent or more interest, and any other natural person exercising ultimate effective control. This is a core part of Customer Due Diligence (CDD) protocols tested in RBI KYC Guidelines MCQs.
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For Non-Resident Indians (NRIs), a certified copy of an officially valid document can be obtained from all of the following except:
Explanation:
Correct: D
Certified copies for NRIs and Persons of Indian Origin (PIOs) can be obtained from authorised officials of overseas bank branches, Notary Public abroad, or the Indian Embassy. It cannot be certified by a family member. This restriction is often highlighted in RBI KYC Guidelines MCQs.
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Which of the following statements regarding the "Designated Director" are correct?
In a company, the Designated Director is the Managing Director or a whole-time Director authorized by the Board.
In a partnership firm, the Designated Director is the Managing Partner.
In a proprietorship concern, the Designated Director is the Proprietor.
In a trust, the Designated Director is the Managing Trustee.
In a company, the Designated Director is the Managing Director or a whole-time Director authorized by the Board.
In a partnership firm, the Designated Director is the Managing Partner.
In a proprietorship concern, the Designated Director is the Proprietor.
In a trust, the Designated Director is the Managing Trustee.
Explanation:
Correct: D
All four statements are correct descriptions of who constitutes the "Designated Director" for different types of Regulated Entities (REs). Correctly identifying this role is essential for accurate answers in RBI KYC Guidelines MCQs.
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What does the "Digital KYC" process involve?
Explanation:
Correct: A
"Digital KYC" is defined as capturing the live photo of the customer and their officially valid document along with the latitude and longitude of the location. This manual process is distinct from the Video-based Customer Identification Process (V-CIP), a distinction often tested in RBI KYC Guidelines MCQs.
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A "Suspicious transaction" is a transaction that gives rise to a reasonable ground of suspicion for all of the following reasons except:
Explanation:
Correct: B
While high-value transactions are monitored, high value alone is not a defining characteristic of a "Suspicious transaction". The grounds include unusual complexity or no economic rationale. This nuance is critical for RBI KYC Guidelines MCQs.
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Which of the following statements regarding "Customer Due Diligence (CDD)" are correct?
CDD is the process of identifying and verifying the customer and the beneficial owner using reliable, independent sources.
CDD is required when carrying out occasional transactions of an amount equal to or exceeding ₹50,000.
CDD is also required if there are doubts about the veracity or adequacy of previously obtained customer identification data.
CDD is the process of identifying and verifying the customer and the beneficial owner using reliable, independent sources.
CDD is required when carrying out occasional transactions of an amount equal to or exceeding ₹50,000.
CDD is also required if there are doubts about the veracity or adequacy of previously obtained customer identification data.
Explanation:
Correct: D
All three statements are correct components of the Customer Due Diligence (CDD) requirements. CDD is triggered for occasional transactions at or above ₹50,000. Mastering these triggers is necessary for RBI KYC Guidelines MCQs.
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What does "On-going Due Diligence" mean?
Explanation:
Correct: C
"On-going Due Diligence" is defined as the regular monitoring of transactions to ensure consistency with the customer's profile. This continuous monitoring is a mandate under the Prevention of Money Laundering Act (PMLA) and a key concept in RBI KYC Guidelines MCQs.
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The definition of "Regulated Entities" (REs) includes all of the following except:
Explanation:
Correct: D
The definition of "Regulated Entities" (REs) includes banks, AIFIs, and NBFCs. CERSAI is the Central KYC Records Registry, not a Regulated Entity in this context. Distinguishing between regulators and entities is vital for RBI KYC Guidelines MCQs.
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What is a "Shell Bank"?
Explanation:
Correct: B
A "Shell Bank" is defined as a bank that has no physical presence in the country of incorporation and is unaffiliated with a regulated financial group. This definition is frequently asked in RBI KYC Guidelines MCQs.
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The "Video based Customer Identification Process (V-CIP)" is described as an alternate method of customer identification with facial recognition and …… by an authorised official of the Regulated Entity (RE).
Explanation:
Correct: A
V-CIP is defined as an alternate method of customer identification with facial recognition and customer due diligence by an authorised official of the RE. This modern method is a hot topic in recent RBI KYC Guidelines MCQs.
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In the context of wire transfers, what does "Cross-border wire transfer" refer to?
Explanation:
Correct: B
A "Cross-border wire transfer" refers to any wire transfer where the ordering and beneficiary financial institutions are in different countries. This definition helps clarify jurisdiction issues in RBI KYC Guidelines MCQs.
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Every Regulated Entity (RE) which is part of a group must implement group-wide programmes against money laundering and terror financing. What must these programmes include?
Explanation:
Correct: A
Regulated Entities (REs) must implement group-wide programmes that include policies for sharing information for client due diligence and risk management. This ensures cohesive compliance, a concept often tested in RBI KYC Guidelines MCQs.
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Which of the following statements regarding the 'Designated Director' and 'Principal Officer' are correct?
The 'Principal Officer' is an officer at the management level responsible for ensuring compliance, monitoring transactions, and reporting information.
The 'Designated Director' is nominated by the Board of the Regulated Entity (RE) to ensure overall compliance with Chapter IV of the Prevention of Money-Laundering (PML) Act.
A Regulated Entity (RE) is explicitly prohibited from nominating the 'Principal Officer' as the 'Designated Director'.
The 'Principal Officer' is an officer at the management level responsible for ensuring compliance, monitoring transactions, and reporting information.
The 'Designated Director' is nominated by the Board of the Regulated Entity (RE) to ensure overall compliance with Chapter IV of the Prevention of Money-Laundering (PML) Act.
A Regulated Entity (RE) is explicitly prohibited from nominating the 'Principal Officer' as the 'Designated Director'.
Explanation:
Correct: D
All three statements are correct. The Principal Officer handles operations, while the Designated Director handles statutory compliance. The prohibition on holding both roles is a specific detail often found in RBI KYC Guidelines MCQs.
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Which of the following statements regarding a Regulated Entity's (RE's) Customer Acceptance Policy are correct?
The policy must ensure that no account is opened in an anonymous or fictitious/benami name.
The policy should not result in the denial of banking or financial facilities to members of the general public.
The policy must specifically avoid denying services to financially or socially disadvantaged groups, including Persons with Disabilities (PwDs).
The policy must ensure that no account is opened in an anonymous or fictitious/benami name.
The policy should not result in the denial of banking or financial facilities to members of the general public.
The policy must specifically avoid denying services to financially or socially disadvantaged groups, including Persons with Disabilities (PwDs).
Explanation:
Correct: D
All three statements are key requirements of a Customer Acceptance Policy. It must prohibit anonymous accounts while remaining inclusive to the general public. Balancing security and inclusion is a key theme in RBI KYC Guidelines MCQs.
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According to the Money Laundering (ML) and Terrorist Financing (TF) Risk Assessment guidelines,
what is the minimum frequency for reviewing the risk assessment exercise?
what is the minimum frequency for reviewing the risk assessment exercise?
Explanation:
Correct: A
The periodicity of the risk assessment exercise should be reviewed at least annually. This regular review cycle is a standard compliance metric tested in RBI KYC Guidelines MCQs.
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What is the rule regarding the outsourcing of Know Your Customer (KYC) norms?
Explanation:
Correct: B
Regulated Entities (REs) must ensure that the decision-making functions related to determining compliance with KYC norms are not outsourced. This safeguards the integrity of the process, a crucial point in RBI KYC Guidelines MCQs.
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If an existing KYC compliant customer of a Regulated Entity (RE) desires to open another account with the same RE,
what is the required procedure?
what is the required procedure?
Explanation:
Correct: C
If an existing KYC compliant customer wants to open another account, there is no need for a fresh CDD exercise for customer identification. This efficiency rule is often quizzed in RBI KYC Guidelines MCQs.
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What action should a Regulated Entity (RE) take if it forms a suspicion of money laundering and reasonably believes that performing the Customer Due Diligence (CDD) process will tip-off the customer?
Explanation:
Correct: A
If performing CDD might tip-off the customer, the RE should stop the process and file an STR with FIU-IND. This "anti-tipping off" protocol is a critical scenario in RBI KYC Guidelines MCQs.
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What is the policy regarding the disclosure of a customer's risk categorization?
Explanation:
Correct: B
The risk categorisation of a customer must be kept confidential and not revealed to them. This confidentiality is maintained to prevent tipping off, a standard rule in RBI KYC Guidelines MCQs.
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For undertaking Customer Due Diligence (CDD) for an individual, what must be obtained in addition to their identity and address proof (like Aadhaar or an OVD)?
Explanation:
Correct: A
For undertaking CDD of an individual, REs shall obtain the PAN (or the equivalent e-document) or Form No. 60. This requirement is fundamental to financial tracking and RBI KYC Guidelines MCQs.
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Which of the following statements regarding a Regulated Entity's (RE's) reliance on a third party for Customer Due Diligence (CDD) are correct?
The RE's reliance is permitted only if the third party is not based in a country or jurisdiction assessed as high risk.
The ultimate responsibility for customer due diligence and undertaking enhanced due diligence measures always remains with the RE.
The RE must obtain all necessary information and certified copies of documents from the third party without delay.
The RE's reliance is permitted only if the third party is not based in a country or jurisdiction assessed as high risk.
The ultimate responsibility for customer due diligence and undertaking enhanced due diligence measures always remains with the RE.
The RE must obtain all necessary information and certified copies of documents from the third party without delay.
Explanation:
Correct: D
All three statements are correct. While reliance on third parties is allowed under strict conditions, the ultimate responsibility remains with the RE. This liability clause is important for RBI KYC Guidelines MCQs.
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Which of the following statements regarding the use of Aadhaar for customer identification are correct?
If a customer provides their Aadhaar number voluntarily, the Regulated Entity (RE) must authenticate it using the e-KYC authentication facility provided by the UIDAI.
In cases where e-KYC authentication cannot be performed (e.g., due to illness, old age, or injury), the RE must perform identification using offline verification or by obtaining a certified copy of any other OVD.
If e-KYC authentication fails, the RE is permitted to accept a self-attested copy of the Aadhaar card as sufficient proof.
If a customer provides their Aadhaar number voluntarily, the Regulated Entity (RE) must authenticate it using the e-KYC authentication facility provided by the UIDAI.
In cases where e-KYC authentication cannot be performed (e.g., due to illness, old age, or injury), the RE must perform identification using offline verification or by obtaining a certified copy of any other OVD.
If e-KYC authentication fails, the RE is permitted to accept a self-attested copy of the Aadhaar card as sufficient proof.
Explanation:
Correct: A
Statement 1 and 2 are correct regarding voluntary Aadhaar use and fallback options. Statement 3 is incorrect; a failed e-KYC requires an alternative procedure, not just a self-attested copy. Aadhaar rules are central to RBI KYC Guidelines MCQs.
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Accounts opened using Aadhaar OTP based e-KYC in non-face-to-face mode shall not be allowed to operate for more than what period unless full Customer Due Diligence (CDD) is completed?
Explanation:
Correct: B
Accounts opened using OTP based e-KYC are limited to one year unless full identification is carried out. This time-bound restriction is a popular question in RBI KYC Guidelines MCQs.
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Regulated Entities (REs) may undertake Video based Customer Identification Process (V-CIP) for all of the following purposes except:
Explanation:
Correct: D
V-CIP is permitted for new CDD, converting OTP accounts, and periodic updation, but not specifically for opening 'Small Accounts' which have their own simple procedures. This distinction helps in solving RBI KYC Guidelines MCQs.
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Which of the following statements regarding the technical and procedural requirements for Video based Customer Identification Process (V-CIP) are correct?
The V-CIP infrastructure must be capable of preventing connections from IP addresses outside India or from spoofed IP addresses.
The video recording must contain the live GPS co-ordinates (geo-tagging) of the customer and a date-time stamp.
If any prompting is observed at the customer's end during the process, the RE official must reject the account opening.
If offline Aadhaar verification is used, the XML file or QR code must not be older than ten working days.
The V-CIP infrastructure must be capable of preventing connections from IP addresses outside India or from spoofed IP addresses.
The video recording must contain the live GPS co-ordinates (geo-tagging) of the customer and a date-time stamp.
If any prompting is observed at the customer's end during the process, the RE official must reject the account opening.
If offline Aadhaar verification is used, the XML file or QR code must not be older than ten working days.
Explanation:
Correct: A
Statements 1, 2, and 3 are correct. Statement 4 is incorrect because the XML/QR code must not be older than three days. Technical specs of V-CIP are increasingly common in RBI KYC Guidelines MCQs.
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Which of the following statements regarding the post-process requirements for Video based Customer Identification Process (V-CIP) are correct?
All accounts opened through V-CIP shall be made operational only after being subject to a concurrent audit.
The entire data and recordings of the V-CIP, including the video, must be stored in a system or systems located in India.
The Regulated Entity (RE) must store the V-CIP data for a minimum of ten years.
All accounts opened through V-CIP shall be made operational only after being subject to a concurrent audit.
The entire data and recordings of the V-CIP, including the video, must be stored in a system or systems located in India.
The Regulated Entity (RE) must store the V-CIP data for a minimum of ten years.
Explanation:
Correct: A
Statements 1 and 2 are correct. V-CIP accounts need a concurrent audit, and data must be stored in India. The retention period is five years, making Statement 3 incorrect. These post-process rules are vital for RBI KYC Guidelines MCQs.
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Which of the following statements regarding the rules for a 'Small Account' are correct?
The aggregate of all credits in a financial year cannot exceed rupees one lakh.
The balance at any point in time cannot exceed rupees fifty thousand.
Foreign remittances are not allowed to be credited into the account unless full Customer Due Diligence (CDD) is completed.
The account can be extended for twelve months beyond its initial twelve-month operational period, provided the holder furnishes evidence of having applied for an OVD.
The aggregate of all credits in a financial year cannot exceed rupees one lakh.
The balance at any point in time cannot exceed rupees fifty thousand.
Foreign remittances are not allowed to be credited into the account unless full Customer Due Diligence (CDD) is completed.
The account can be extended for twelve months beyond its initial twelve-month operational period, provided the holder furnishes evidence of having applied for an OVD.
Explanation:
Correct: D
All four statements correctly describe the limitations of a 'Small Account', including credit limits, balance caps, and remittance restrictions. These figures are high-yield facts for RBI KYC Guidelines MCQs.
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Which of the following statements regarding the Customer Due Diligence (CDD) for a sole proprietary firm are correct?
The Regulated Entity (RE) must perform CDD on the individual proprietor.
The RE must obtain any two of the specified documents as proof of the firm's business/activity.
An RE may, at its discretion, accept only one business document if it is satisfied that two are not available, provided it undertakes contact point verification.
The Regulated Entity (RE) must perform CDD on the individual proprietor.
The RE must obtain any two of the specified documents as proof of the firm's business/activity.
An RE may, at its discretion, accept only one business document if it is satisfied that two are not available, provided it undertakes contact point verification.
Explanation:
Correct: D
All three statements are correct. While two documents are standard, REs can accept one with contact point verification. This flexibility in proprietorship CDD is a nuance tested in RBI KYC Guidelines MCQs.
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According to the rules for identifying a Beneficial Owner (BO) for a Legal Person, in
which of the following cases is it not necessary to identify and verify the identity of any shareholder or beneficial owner?
which of the following cases is it not necessary to identify and verify the identity of any shareholder or beneficial owner?
Explanation:
Correct: C
If the customer is an entity listed on a stock exchange in India, it is not necessary to identify beneficial owners. This exemption for listed companies is a standard exclusion found in RBI KYC Guidelines MCQs.
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What is the minimum periodicity for a Regulated Entity (RE) to conduct a periodic review of the risk categorisation of accounts?
Explanation:
Correct: A
A system of periodic review of risk categorisation of accounts shall be put in place, with such periodicity being at least once in six months. Timelines are crucial for RBI KYC Guidelines MCQs.
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What is the minimum periodicity for carrying out periodic updation of KYC for different customer risk categories?
High-risk customers: Once in every two years.
Medium risk customers: Once in every eight years.
Low-risk customers: Once in every ten years.
High-risk customers: Once in every two years.
Medium risk customers: Once in every eight years.
Low-risk customers: Once in every ten years.
For an individual customer categorized as low risk,
what is the extended timeline provided for the updation of KYC that has fallen due?
what is the extended timeline provided for the updation of KYC that has fallen due?
For opening an account of a partnership firm, certified copies of all the following documents are required except:
Which of the following statements regarding the periodic updation of KYC for an individual customer are correct?
If there is no change in KYC information, a self-declaration from the customer via registered email-id, mobile number, or ATM is sufficient.
If there is a change only in the address details, a self-declaration of the new address is required, which the Regulated Entity must then verify through positive confirmation within two months.
Any change in KYC information, including a change of address, requires the customer to visit the branch in person.
If there is no change in KYC information, a self-declaration from the customer via registered email-id, mobile number, or ATM is sufficient.
If there is a change only in the address details, a self-declaration of the new address is required, which the Regulated Entity must then verify through positive confirmation within two months.
Any change in KYC information, including a change of address, requires the customer to visit the branch in person.
Which of the following statements regarding periodic KYC updation procedures are correct?
The conditions and limitations (e.g., balance limits) that apply to new accounts opened via Aadhaar OTP e-KYC do not apply when that method is used for periodic updation.
If a 'customer other than an individual' (Legal Entity) reports a change in KYC information, the Regulated Entity (RE) must undertake the full KYC process, equivalent to onboarding a new customer.
As an additional measure during periodic updation, the RE must verify the customer's PAN details, if available, from the database of the issuing authority.
The conditions and limitations (e.g., balance limits) that apply to new accounts opened via Aadhaar OTP e-KYC do not apply when that method is used for periodic updation.
If a 'customer other than an individual' (Legal Entity) reports a change in KYC information, the Regulated Entity (RE) must undertake the full KYC process, equivalent to onboarding a new customer.
As an additional measure during periodic updation, the RE must verify the customer's PAN details, if available, from the database of the issuing authority.
If there is any update in the documents submitted by a customer at the time of establishing an account-based relationship, within what period must the customer submit the update to the Regulated Entity (RE)?
Which of the following statements regarding the consequences of non-compliance with PAN or Form No. 60 requirements are correct?
If a customer with an existing account informs the RE in writing that they do not want to submit their PAN or Form No. 60, the RE must close the account and settle all obligations.
For an asset account (like a loan account), "temporary ceasing of operations" due to failure to submit PAN/Form 60 means only credits shall be allowed.
For a deposit account, "temporary ceasing of operations" means only debits shall be allowed.
If a customer with an existing account informs the RE in writing that they do not want to submit their PAN or Form No. 60, the RE must close the account and settle all obligations.
For an asset account (like a loan account), "temporary ceasing of operations" due to failure to submit PAN/Form 60 means only credits shall be allowed.
For a deposit account, "temporary ceasing of operations" means only debits shall be allowed.
Which of the following statements regarding Enhanced Due Diligence (EDD) for non-face-to-face customer onboarding (other than Aadhaar OTP e-KYC) are correct?
Customers onboarded through such modes shall be categorized as high-risk and subjected to enhanced monitoring.
The first transaction in such an account shall be a credit from an existing KYC-complied bank account of the same customer.
These accounts are automatically converted to medium-risk after one year of satisfactory operation.
Customers onboarded through such modes shall be categorized as high-risk and subjected to enhanced monitoring.
The first transaction in such an account shall be a credit from an existing KYC-complied bank account of the same customer.
These accounts are automatically converted to medium-risk after one year of satisfactory operation.
Which of the following statements regarding "Politically Exposed Persons" (PEPs) are correct?
PEPs are defined as individuals entrusted with prominent public functions by a foreign country, such as Heads of State, senior politicians, or senior government officers.
The definition of PEPs includes individuals entrusted with prominent public functions within India.
If an existing customer is subsequently identified as a PEP, the Regulated Entity must obtain senior management's approval to continue the business relationship.
PEPs are defined as individuals entrusted with prominent public functions by a foreign country, such as Heads of State, senior politicians, or senior government officers.
The definition of PEPs includes individuals entrusted with prominent public functions within India.
If an existing customer is subsequently identified as a PEP, the Regulated Entity must obtain senior management's approval to continue the business relationship.
Which of the following statements regarding the preservation of records by Regulated Entities (REs) are correct?
Records pertaining to the identification of customers and their addresses must be preserved for at least five years after the business relationship has ended.
All necessary records of transactions between the RE and the customer must be preserved for at least five years from the date of the transaction.
Both identification and transaction records must be kept for at least ten years after the business relationship has ended.
Records pertaining to the identification of customers and their addresses must be preserved for at least five years after the business relationship has ended.
All necessary records of transactions between the RE and the customer must be preserved for at least five years from the date of the transaction.
Both identification and transaction records must be kept for at least ten years after the business relationship has ended.
What is the rule for Regulated Entities (REs) regarding professional intermediaries who are bound by client confidentiality?
What Customer Due Diligence (CDD) is required when opening a savings bank account for a Self Help Group (SHG)?
When a bank opens a Non-Resident Ordinary (NRO) account for a foreign student, what transaction limitations apply pending the verification of the local address?
What is the requirement for Regulated Entities (REs) regarding customers who are non-profit organisations (NPOs)?
Consider the following statements:
Assertion
Assertion
Which of the following statements regarding sanctions list verification are correct?
Regulated Entities (REs) must verify the United Nations Security Council (UNSC) Sanctions Lists on a daily basis.
The daily verification includes the 'UNSCR 1718 Sanctions List' related to the Democratic People's Republic of Korea.
REs must also take into account the lists in the first and fourth schedules of the Unlawful Activities (Prevention) Act (UAPA), 1967.
Regulated Entities (REs) must verify the United Nations Security Council (UNSC) Sanctions Lists on a daily basis.
The daily verification includes the 'UNSCR 1718 Sanctions List' related to the Democratic People's Republic of Korea.
REs must also take into account the lists in the first and fourth schedules of the Unlawful Activities (Prevention) Act (UAPA), 1967.
Which of the following statements regarding compliance with the WMD Act, 2005 are correct?
The Director, Financial Intelligence Unit-India (FIU-IND) is designated as the Central Nodal Officer (CNO) for the WMD Act.
If an RE finds a match between a customer's particulars and the designated list, it shall not carry out the transaction.
Upon finding a match, the RE must immediately inform the Central Nodal Officer (CNO).
The Director, Financial Intelligence Unit-India (FIU-IND) is designated as the Central Nodal Officer (CNO) for the WMD Act.
If an RE finds a match between a customer's particulars and the designated list, it shall not carry out the transaction.
Upon finding a match, the RE must immediately inform the Central Nodal Officer (CNO).
When are Regulated Entities (REs) required to undertake countermeasures called for by an international or intergovernmental organisation?
When dealing with persons from jurisdictions identified by the Financial Action Task Force (FATF) as having strategic deficiencies, what are Regulated Entities (REs) required to examine?
Regulated Entities (REs) must maintain secrecy regarding customer information. All of the following are listed as exceptions to this rule except:
Which of the following statements regarding the uploading of records to the Central KYC Records Registry (CKYCR) are correct?
Regulated Entities (REs) must capture and upload a customer's KYC records onto CKYCR within 10 days of the commencement of an account-based relationship.
REs were required to begin uploading KYC records pertaining to accounts of Legal Entities (LEs) opened on or after April 1, 2021.
The upload deadline for all accounts, both individual and Legal Entity, is 30 days.
Regulated Entities (REs) must capture and upload a customer's KYC records onto CKYCR within 10 days of the commencement of an account-based relationship.
REs were required to begin uploading KYC records pertaining to accounts of Legal Entities (LEs) opened on or after April 1, 2021.
The upload deadline for all accounts, both individual and Legal Entity, is 30 days.
An RE retrieves a customer's KYC record from CKYCR using their KYC Identifier. Under which circumstance can the RE then ask the customer to submit additional identification documents?
What is the maximum period for which payment instruments like cheques, drafts, and pay orders are valid for payment?
How are "Money Mules" described in the context of banking operations?
What action must Regulated Entities (REs) take before launching new products, business practices, or using new technologies?
Which of the following statements regarding correspondent banking relationships are correct?
Regulated Entities (REs) shall not enter into or continue a correspondent banking relationship with a shell bank.
REs must ensure that their respondent banks do not permit their accounts to be used by shell banks.
In the case of 'payable-through-accounts', the correspondent bank must be satisfied that the respondent bank has conducted Customer Due Diligence (CDD) on customers having direct access to its accounts.
Regulated Entities (REs) shall not enter into or continue a correspondent banking relationship with a shell bank.
REs must ensure that their respondent banks do not permit their accounts to be used by shell banks.
In the case of 'payable-through-accounts', the correspondent bank must be satisfied that the respondent bank has conducted Customer Due Diligence (CDD) on customers having direct access to its accounts.
Which of the following statements regarding wire transfer information requirements are correct?
All cross-border wire transfers must be accompanied by the originator's name, account number, and address (or equivalent unique identifier).
Domestic wire transfers of ₹50,000 or more, where the originator is not an account holder, must include the same full originator and beneficiary information as cross-border transfers.
Person-to-person wire transfers effected using a credit or debit card are not exempt and are subject to the wire transfer information requirements.
If a non-account holder is found to be intentionally structuring transfers below the ₹50,000 threshold, customer identification must be performed.
All cross-border wire transfers must be accompanied by the originator's name, account number, and address (or equivalent unique identifier).
Domestic wire transfers of ₹50,000 or more, where the originator is not an account holder, must include the same full originator and beneficiary information as cross-border transfers.
Person-to-person wire transfers effected using a credit or debit card are not exempt and are subject to the wire transfer information requirements.
If a non-account holder is found to be intentionally structuring transfers below the ₹50,000 threshold, customer identification must be performed.
What must a beneficiary Regulated Entity (RE) have in place to determine when to execute, reject, or suspend a wire transfer that lacks required originator or beneficiary information?
When a Regulated Entity (RE) engages with an unregulated entity in the process of a wire transfer, what must the agreement or arrangement with that entity clearly include?
Which of the following statements regarding transaction rules at the ₹50,000 threshold are correct?
Remittances (like demand drafts) for ₹50,000 or more must be by debit to an account or against a cheque, not against cash.
Payments for an RE's own products or credit card dues for ₹50,000 or more must be by debit to an account or against a cheque, and the PAN must be verified.
When selling third-party products, an RE must verify the identity and address of a walk-in customer for transactions above ₹50,000.
Co-operative banks can only issue 'at par' cheques to walk-in customers against cash for amounts less than ₹50,000.
Remittances (like demand drafts) for ₹50,000 or more must be by debit to an account or against a cheque, not against cash.
Payments for an RE's own products or credit card dues for ₹50,000 or more must be by debit to an account or against a cheque, and the PAN must be verified.
When selling third-party products, an RE must verify the identity and address of a walk-in customer for transactions above ₹50,000.
Co-operative banks can only issue 'at par' cheques to walk-in customers against cash for amounts less than ₹50,000.
Which of the following statements regarding an RE's staffing and audit policies for AML/KYC compliance are correct?
REs must have an adequate screening mechanism, such as a "Know Your Employee" policy, as an integral part of their hiring process.
The internal audit function must be staffed with persons who are adequately trained and well-versed in the RE's KYC/AML/CFT policies and regulations.
All new hires, regardless of department, must be certified AML specialists.
REs must have an adequate screening mechanism, such as a "Know Your Employee" policy, as an integral part of their hiring process.
The internal audit function must be staffed with persons who are adequately trained and well-versed in the RE's KYC/AML/CFT policies and regulations.
All new hires, regardless of department, must be certified AML specialists.
Which of the following statements regarding the procedural rules for the "Digital KYC Process" are correct?
The live photograph of the customer must be watermarked with the Customer Application Form (CAF) number, GPS coordinates, authorized official's details, and a date/time stamp.
The live photograph must be taken against a white background, and no other person shall be allowed in the frame.
The customer's signature is obtained via a One Time Password (OTP) validated on their mobile number.
For the customer's signature OTP, the mobile number of the authorized officer registered with the Regulated Entity (RE) shall not be used.
The live photograph of the customer must be watermarked with the Customer Application Form (CAF) number, GPS coordinates, authorized official's details, and a date/time stamp.
The live photograph must be taken against a white background, and no other person shall be allowed in the frame.
The customer's signature is obtained via a One Time Password (OTP) validated on their mobile number.
For the customer's signature OTP, the mobile number of the authorized officer registered with the Regulated Entity (RE) shall not be used.
Completed!
Final Score: 0/67
RBI KYC Guidelines MCQs are the cornerstone topic for banking aspirants aiming for high scores in General Awareness. In this guide, we cover the 67 most important questions derived from the Master Direction. This best-in-class mock test is specifically designed for RBI Grade B, SBI PO, IBPS PO, and All banking exams to help you master the regulatory concepts quickly.
Why This RBI KYC Guidelines MCQs Test Matters?
Exam Weightage: For RBI Grade B, this topic is critical for both Phase 1 General Awareness and Phase 2 ESI regulations. For SBI and IBPS PO, questions on KYC norms frequently appear in the Banking Awareness section and Interviews.
Difficulty: Moderate to Hard (Regulatory & Concept-based).
Practice RBI KYC Guidelines MCQs (Live Mock Test)
Quick Revision: Key Facts for RBI KYC Guidelines MCQs
FATF Membership: India is a member of the Financial Action Task Force (FATF).
OVDs: PAN Card is NOT an Officially Valid Document (OVD) for address proof.
Small Account Limits: Max balance ₹50,000; Max annual credits ₹1,00,000.
KYC Updates: High Risk (2 years), Medium Risk (8 years), Low Risk (10 years).
V-CIP Storage: All video data must be stored in India for 5 years.
Aadhaar OTP Accounts: Valid for only 1 year without full CDD.
Cash Threshold: Demand Drafts of ₹50,000+ cannot be issued against cash.
NRO Student Account: Max remittance USD 1,000 until local address verification.
Records Retention: 5 years after relationship ends (ID records) or transaction date (transaction records).
Frequently Asked Questions
Why are RBI KYC Guidelines MCQs critical for banking exams?
They are a high-scoring area in General Awareness and are essential for interview questions in RBI Grade B and PO exams.
Does this test cover the latest amendments?
Yes, these RBI KYC Guidelines MCQs include the latest rules on V-CIP, Digital KYC, and periodic updation.
What is the difference between V-CIP and Digital KYC?
V-CIP is a video-based process, whereas Digital KYC involves capturing a live photo with geo-tagging. Both are covered in our RBI KYC Guidelines MCQs.
How often are KYC norms updated?
The RBI updates the Master Direction periodically. This test reflects the current consolidated guidelines.
Is the PAN card an OVD?
No, the PAN card is not an OVD for address proof, though it is mandatory for financial transactions.
What is the risk review period?
Risk categorization must be reviewed at least once every six months.
Can I use this for JAIIB/CAIIB?
Absolutely. These RBI KYC Guidelines MCQs are highly relevant for the legal and regulatory aspects of JAIIB and CAIIB.