Q23: 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?

The RE shall not pursue the CDD process and instead file a Suspicious Transaction Report (STR) with FIU-IND.

The RE must complete the CDD process immediately before the customer becomes aware.

The RE must obtain explicit consent from the customer before proceeding with the CDD.

The RE shall close the account immediately without filing any report.

✅ Correct Answer: 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.

Bank Promotion Exam Guide