The IIBF AML KYC Exam 2026 is the cornerstone topic for aspirants. In this guide, we cover the 105 most important questions. This Positive mock test is specifically designed for IIBF Certificate Exam to help you master the concepts quickly.
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✅ General Practice
Q1When a branch or majority-owned subsidiary of a bank located abroad faces a variance between the KYC/AML standards prescribed by the RBI and the host country regulator, which standard must it adopt?Q2Which of the following statements correctly describe the "Controlling Ownership Interest" or entitlement thresholds for determining the Beneficial Owner (BO) of various legal entities?Q3Which of the following documents is NOT included in the specific definition of "Officially Valid Document" (OVD) for the purpose of verifying identity and address?Q4For Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs), the bank may utilize a "Certified Copy" of an OVD. Which of the following officials is authorized to certify such a copy abroad?Q5Consider the following statements regarding "Deemed Officially Valid Documents" (OVDs) submitted when an OVD does not have an updated address:Q6Where the customer is a trust, the identification of beneficial owner(s) shall include identification of the author of the trust, the trustee, the beneficiaries with …… interest in the trust, and any other natural person exercising ultimate effective control.Q7If an Officially Valid Document (OVD) presented by a foreign national does not contain address details, which specific combination of documents is accepted as proof of address?Q8Which of the following circumstances constitute a "Suspicious Transaction"?Q9Customer Due Diligence (CDD) is mandatory when carrying out an occasional transaction of an amount equal to or exceeding ……, whether conducted as a single transaction, or several transactions that appear to be connected.Q10The term "Payable-through accounts" specifically refers to which of the following?Q11Consider the following statements regarding "Shell Banks":Q12In the context of wire transfers, what is a "Cover Payment"?Q13A "Domestic wire transfer" can involve a payment message transfer system located outside of India, provided the ordering and beneficiary financial institutions are both located in India.Q14How is the "Video based Customer Identification Process (V-CIP)" treated for the purpose of Customer Due Diligence (CDD)?Q15Which of the following is NOT one of the four key elements that the Know Your Customer (KYC) policy of a bank must include?Q16A "Serial Payment" in the context of wire transfers is defined as:Q17How frequently must a bank review its internal "Money Laundering (ML) and Terrorist Financing (TF) Risk Assessment"?Q18Regarding the "Customer Acceptance Policy," banks are explicitly prohibited from opening accounts in which of the following manners?Q19Which specific function regarding KYC norms is a bank prohibited from outsourcing?Q20According to the Customer Acceptance Policy, how should a bank handle a situation where an existing KYC-compliant customer desires to open another account or avail of a new product?Q21If a bank forms a suspicion of money laundering and reasonably believes that performing the Customer Due Diligence (CDD) process will "tip-off" the customer, it must proceed with the CDD process cautiously.Q22To ensure compliance with KYC/AML policies, banks must submit audit notes and compliance reports to the Audit Committee at what periodicity?Q23When rejecting an application for onboarding or periodic updation of KYC, what specific procedural requirement must the concerned officer fulfill?Q24Banks are permitted to inform a customer of their specific "Risk Categorization" (Low, Medium, or High) to ensure transparency in the banking relationship.Q25Under which of the following circumstances is a bank required to undertake the identification of customers (Customer Identification Procedure)?Q26Regarding the opening of bank accounts, what is the specific regulatory stance on "Introductions"?Q27A bank may rely on Customer Due Diligence (CDD) done by a third party, subject to several conditions. Which of the following is NOT a valid condition for such reliance?Q28When a customer submits a "Proof of Possession of Aadhaar Number" where authentication is not required (e.g., voluntarily), what specific action must the bank ensure regarding the Aadhaar number on the document?Q29When a bank grants an exception for CDD (e.g., offline verification instead of e-KYC) due to a customer's injury, illness, or old age, which of the following controls must be implemented?Q30While opening an account, the bank must verify the Permanent Account Number (PAN) from the verification facility of the issuing authority. If the customer furnishes an Officially Valid Document (OVD) that does not have an updated address, they are required to submit an OVD with the current address within a period of …… months.Q31Accounts opened using Aadhaar OTP-based e-KYC in non-face-to-face mode are subject to strict aggregate limitations. What is the maximum allowable aggregate balance in all deposit accounts of the customer?Q32Regarding the "Digital KYC Process," which of the following statements correctly describe the requirements for capturing the customer's live photograph?Q33In the context of the "Digital KYC Process," how is the customer's signature obtained and validated on the Customer Application Form (CAF)?Q34Which of the following is NOT a permitted use case for the Video-based Customer Identification Process (V-CIP)?Q35Which of the following statements regarding the "V-CIP Infrastructure" are incorrect?Q36For borrowal accounts opened using OTP-based e-KYC in non-face-to-face mode, the bank shall sanction only term loans, and the aggregate amount of such term loans shall not exceed …… in a year.Q37In the Digital KYC process, if a customer does not have their own mobile number, the bank is strictly prohibited from using the mobile number of a family member or relative for the purpose of OTP verification.Q38If a bank opens a deposit account using OTP-based e-KYC in non-face-to-face mode, what is the maximum period the account can operate before a full Customer Due Diligence (CDD) procedure is required?Q39When conducting a Video-based Customer Identification Process (V-CIP) using offline verification of Aadhaar via an XML file or Aadhaar Secure QR Code, what is the maximum validity period of the XML file or QR code generation date?Q40During the Video-based Customer Identification Process (V-CIP), which of the following actions is explicitly invalid or prohibited?Q41A "Small Account" can be credited with foreign remittances, provided the amount does not exceed ₹10,000 in a month.Q42Which of the following limitations apply to a "Small Account"?Q43For a Sole Proprietary firm, if a bank decides to accept only one document as proof of business (instead of the standard two) due to the firm's inability to furnish two, what additional measure is mandatory?Q44Regarding "Assisted V-CIP," which of the following statements correctly describes the role of Business Correspondents (BCs)?Q45Which of the following authorities is mandatory to conduct the Vulnerability Assessment, Penetration Testing, and Security Audit of the V-CIP infrastructure?Q46For opening an account of a Company, which of the following documents is mandatory to obtain as a certified copy?Q47According to the guidelines on "Monitoring of Transactions", how frequently must a bank review the risk categorization of customer accounts?Q48Which of the following correctly matches the "Risk Category" with the mandatory minimum periodicity for KYC updation?Q49For the purpose of opening an account, which of the following entities are explicitly included under the term "Unincorporated Association"?Q50When opening an account for a Trust, which of the following parties must be identified as part of the beneficial owner identification process?
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Frequently Asked Questions
What is the specific difference between “Digital KYC” and “V-CIP”?
V-CIP is a live, face-to-face video interaction with a bank official (treated as physical presence). Digital KYC is merely capturing a live photo with geo-tagging (GPS) without a live interview. V-CIP is a higher standard.
Can a “Small Account” receive foreign remittances if below ₹10,000?
No. Foreign remittances are strictly prohibited in Small Accounts regardless of amount. The customer must complete full KYC to receive foreign funds.
Is the PAN Card considered an OVD for address proof?
No. The PAN Card is an OVD for Identity only. It is NOT accepted as proof of address under the RBI Master Direction because it does not contain address details.
Does the “Travel Rule” apply to Crypto/Virtual Digital Assets?
Yes. Virtual Asset Service Providers (VASPs) must ensure Originator and Beneficiary details “travel” with the crypto transfer. Beneficiary exchanges must also screen wallets against sanction lists.
What constitutes “Tipping Off” under PMLA?
It is a criminal offence where a bank official informs a customer that their transaction is being reported (STR) or investigated. The existence of an STR must be kept strictly confidential.
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