RBI KYC Guidelines MCQs – 67 Most Expected Questions

Consider the following statements:

Assertion (A) - India is committed to upholding measures to protect the integrity of the international financial system.

Reason (R) - India is a member of the Financial Action Task Force (FATF), an inter-governmental body that sets standards for combating money laundering and terrorist financing.

A. Both A and R are true, and R explains A

B. Both A and R are true, but R does not explain A

C. A is true, but R is false

D. A is false, but R is true

What two pieces of legislation form the primary legal framework for Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) in India?

A. The Reserve Bank of India Act, 1934 and the Banking Regulation Act, 1949

B. The Prevention of Money-Laundering Act, 2002 and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005

C. The Foreign Exchange Management Act, 1999 and the Companies Act, 2013

D. The Financial Action Task Force (FATF) Act, 1989 and the Unlawful Activities (Prevention) Act, 1967

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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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.

A. 1, 2 and 3 only

B. 1, 3 and 4 only

C. 2 and 3 only

D. 1 and 2 only

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.

A. 1 and 2 only

B. 2 and 3 only

C. 1 and 3 only

D. All of the above

When identifying the beneficial owner(s) for a trust,

which of the following parties must be identified?

A. Only the author of the trust and the trustee.

B. Only the beneficiaries with 25 percent or more interest in the trust.

C. The author of the trust, the trustee, the beneficiaries with 10 percent or more interest, and any other person exercising ultimate effective control.

D. Only the senior managing official of the trust.

For Non-Resident Indians (NRIs), a certified copy of an officially valid document can be obtained from all of the following except:

A. Authorised officials of overseas branches of Scheduled Commercial Banks registered in India.

B. Notary Public abroad.

C. Indian Embassy/Consulate General in the country where the customer resides.

D. The customer's immediate family member residing abroad.

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.

A. 1 and 2 only

B. 1, 2 and 3 only

C. 2, 3 and 4 only

D. All of the above

What does the "Digital KYC" process involve?

A. The capturing of a live photo of the customer and their officially valid document or proof of possession of Aadhaar, along with the latitude and longitude of the location.

B. A video-based customer identification process (V-CIP) conducted over a secured network.

C. The submission of a self-attested copy of an OVD and a recent photograph.

D. The retrieval of KYC records from the Central KYC Records Registry (CKYCR) using a KYC Identifier.

A "Suspicious transaction" is a transaction that gives rise to a reasonable ground of suspicion for all of the following reasons except:

A. It appears to be made in circumstances of unusual or unjustified complexity.

B. It is a high-value transaction exceeding a pre-defined threshold.

C. It appears to not have an economic rationale or bona-fide purpose.

D. It may involve proceeds of an offence specified in the Schedule to the Prevention of Money-Laundering Act, 2002.

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.

A. 1 and 2 only

B. 2 and 3 only

C. 1 and 3 only

D. All of the above

What does "On-going Due Diligence" mean?

A. The initial process of identifying and verifying a new customer.

B. The one-time verification of a beneficial owner.

C. Regular monitoring of transactions in accounts to ensure they are consistent with knowledge about the customer, their business, risk profile, and source of funds.

D. The periodic updation of KYC documents every ten years for low-risk customers.

The definition of "Regulated Entities" (REs) includes all of the following except:

A. All Scheduled Commercial Banks (SCBs) and Regional Rural Banks (RRBs).

B. All India Financial Institutions (AIFIs).

C. All Non-Banking Finance Companies (NBFCs).

D. The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI).

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What is a "Shell Bank"?

A. A bank that is unaffiliated with a regulated financial group.

B. A bank that has no physical presence in the country where it is incorporated and licensed, and is unaffiliated with a regulated financial group.

C. A bank whose "meaningful mind and management" is located within a country, even if it only has a local agent.

D. A bank that is used exclusively for correspondent banking services.

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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).

A. customer due diligence

B. periodic updation

C. record management

D. risk management

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In the context of wire transfers, what does "Cross-border wire transfer" refer to?

A. Any wire transfer where the ordering and beneficiary financial institutions are located in India, but the payment system is in another country.

B. Any wire transfer where the ordering financial institution and beneficiary financial institution are located in different countries.

C. A transfer comprised of a number of individual wire transfers being sent to the same financial institution.

D. A direct sequential chain of payment where the payment message travels together with the wire transfer.

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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?

A. Group-wide policies for sharing information required for client due diligence and money laundering/terror finance risk management.

B. A policy to report all shared information to the Reserve Bank of India.

C. A rule prohibiting the sharing of any customer information between group entities.

D. Safeguards to prevent tipping-off, but no requirement to share information for client due diligence.

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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'.

A. 1 and 2 only

B. 2 and 3 only

C. 1 and 3 only

D. All of the above

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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).

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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?

A. At least annually.

B. At least once every six months.

C. At least once every two years.

D. Only when a new product is launched.

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What is the rule regarding the outsourcing of Know Your Customer (KYC) norms?

A. All KYC processes, including decision-making, can be fully outsourced to third-party vendors.

B. Regulated Entities (REs) shall ensure that decision-making functions of determining compliance with KYC norms are not outsourced.

C. Only the concurrent audit of KYC compliance can be outsourced.

D. Outsourcing of KYC decision-making is permitted if the vendor is also a Regulated Entity (RE).

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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?

A. A fresh Customer Due Diligence (CDD) exercise must be completed for the new account.

B. The customer must submit all Officially Valid Documents (OVDs) again.

C. There shall be no need for a fresh CDD exercise as far as identification of the customer is concerned.

D. The new account can only be opened after a full risk assessment is conducted again.

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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?

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

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

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

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

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What is the policy regarding the disclosure of a customer's risk categorization?

A. The risk categorization shall be revealed to the customer to ensure transparency.

B. The risk categorization shall be kept confidential and shall not be revealed to the customer to avoid tipping off.

C. The risk categorization can be revealed to the customer only if they are categorized as 'low risk'.

D. The risk categorization must be published in the customer's annual account statement.

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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)?

A. The Permanent Account Number (PAN) or Form No. 60.

B. A letter of introduction from an existing customer.

C. A declaration of financial status certified by a notary.

D. A certified copy of their birth certificate.

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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?

A. Six months

B. One year

C. Two years

D. Three years

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Regulated Entities (REs) may undertake Video based Customer Identification Process (V-CIP) for all of the following purposes except:

A. Customer Due Diligence (CDD) for new individual customers.

B. Conversion of existing accounts opened using Aadhaar OTP based e-KYC.

C. Updation or Periodic updation of KYC for eligible customers.

D. Opening a 'Small Account' which has transaction limitations.

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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.

A. 1, 2 and 3 only

B. 1, 3 and 4 only

C. 2 and 4 only

D. All of the above

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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.

A. 1, 2 and 3 only

B. 1, 3 and 4 only

C. 2, 3 and 4 only

D. All of the above

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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?

A. When the customer is a partnership firm.

B. When the customer is a trust.

C. When the customer is an entity listed on a stock exchange in India.

D. When the customer is an unincorporated association.

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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?

A. At least once in six months.

B. At least once every year.

C. At least once every two years.

D. At least once every eight years.

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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.

A. 1 only

B. 1 and 3 only

C. 2 and 3 only

D. 1, 2, and 3 are all correct

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For an individual customer categorized as low risk,

what is the extended timeline provided for the updation of KYC that has fallen due?

A. All transactions are allowed, and updation must be done within one year of its falling due or upto June 30, 2026, whichever is later.

B. The account is immediately frozen, and updation must be done within 30 days.

C. All transactions are allowed, but updation must be completed by December 31, 2025.

D. Only credit transactions are allowed, and updation must be done within six months of its falling due.

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For opening an account of a partnership firm, certified copies of all the following documents are required except:

A. Registration certificate

B. Partnership deed

C. Permanent Account Number of the partnership firm

D. The personal Income Tax Returns of every partner

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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)?

A. Within 7 days of the update.

B. Within 30 days of the update.

C. Within 90 days of the update.

D. At the time of the next scheduled periodic updation.

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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.

A. 1 and 3 only

B. 2 and 3 only

C. 1 and 2 only

D. All of the above

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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What is the rule for Regulated Entities (REs) regarding professional intermediaries who are bound by client confidentiality?

A. REs shall not open accounts of such professional intermediaries who are bound by any client confidentiality that prohibits disclosure of the client details to the RE.

B. REs may open 'pooled' accounts for these intermediaries, provided the intermediary is regulated.

C. REs must rely on the 'customer due diligence' (CDD) done by such intermediaries, as they are regulated.

D. REs must obtain the client details from the intermediary within 30 days of opening the account.

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What Customer Due Diligence (CDD) is required when opening a savings bank account for a Self Help Group (SHG)?

A. CDD of all members of the SHG is required.

B. CDD of all the office bearers shall suffice; CDD of all members is not required.

C. CDD of all members of the SHG is required only at the time of credit linking, not for opening the account.

D. CDD of all office bearers shall suffice for opening the account, and CDD of all members may be undertaken at the time of credit linking.

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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?

A. There are no limitations; the account is fully operational.

B. Allowing foreign remittances not exceeding USD 1,000 and a cap of rupees fifty thousand on aggregate.

C. The account can only receive credits, but no debits are allowed.

D. The account is limited to foreign remittances not exceeding USD 5,000 and an aggregate cap of rupees one lakh.

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What is the requirement for Regulated Entities (REs) regarding customers who are non-profit organisations (NPOs)?

A. REs must obtain an annual report and audited financials from the NPO.

B. REs must ensure the details of such customers are registered on the DARPAN Portal of NITI Aayog.

C. REs must categorize all NPOs as high-risk and apply enhanced due diligence.

D. REs must report all transactions of NPOs to the Financial Intelligence Unit - India (FIU-IND).

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Consider the following statements:

Assertion (A) - A Regulated Entity (RE) must immediately freeze all operations in an account for which it is filing a Suspicious Transaction Report (STR).

Reason (R) - Every RE, its directors, officers, and employees must ensure that the fact of furnishing information to the Director, FIU-IND is kept confidential.

A. Both A and R are true, and R explains A

B. Both A and R are true, but R does not explain A

C. A is true, but R is false

D. A is false, but R is true

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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).

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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When are Regulated Entities (REs) required to undertake countermeasures called for by an international or intergovernmental organisation?

A. Immediately upon publication by the organisation.

B. Only when the organisation is a member of the FATF.

C. When India is a member of the organisation and the countermeasures have been accepted by the Central Government.

D. REs are not required to undertake such countermeasures; only the Central Government is.

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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?

A. Only the customer's identity and address.

B. The background and purpose of the transactions, and to retain written findings.

C. The customer's risk profile, without needing to retain written findings.

D. The transactions only if they exceed rupees fifty thousand.

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Regulated Entities (REs) must maintain secrecy regarding customer information. All of the following are listed as exceptions to this rule except:

A. Where disclosure is under compulsion of law.

B. Where there is a duty to the public to disclose.

C. Where the disclosure is made with the express or implied consent of the customer.

D. Where the disclosure is requested by another RE for risk assessment.

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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?

A. The RE is conducting its annual audit.

B. The RE is updating its internal software.

C. The KYC record retrieved is incomplete or not as per current applicable KYC norms.

D. The customer wishes to make a high-value withdrawal.

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What is the maximum period for which payment instruments like cheques, drafts, and pay orders are valid for payment?

A. They shall not be paid if presented beyond the period of three months from the date of such instruments.

B. They shall not be paid if presented beyond the period of six months from the date of such instruments.

C. They shall not be paid if presented beyond the period of one month from the date of such instruments.

D. There is no specified time limit for their presentation.

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How are "Money Mules" described in the context of banking operations?

A. Customers who frequently travel and conduct international wire transfers.

B. Third parties recruited by criminals to launder the proceeds of fraud schemes, such as phishing and identity theft.

C. Bank employees who collude with criminals to open fictitious accounts.

D. Customers who intentionally structure transactions to fall below reporting thresholds.

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What action must Regulated Entities (REs) take before launching new products, business practices, or using new technologies?

A. They must identify and assess the Money Laundering (ML) and Terrorist Financing (TF) risks associated with them.

B. They must obtain a special license from the Reserve Bank of India.

C. They must ensure the new technology is only used for high-risk customers.

D. They must report these new products to the Financial Intelligence Unit - India (FIU-IND).

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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.

A. 1, 2 and 3 only

B. 1, 2 and 4 only

C. 2, 3 and 4 only

D. All of the above

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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?

A. A system for real-time monitoring of all transactions, regardless of risk.

B. Effective risk-based policies and procedures.

C. A dedicated compliance officer for every transaction.

D. A minimum five-year record of all incomplete transfers.

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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?

A. A clause that transfers all liability for compliance to the unregulated entity.

B. The obligations under the wire transfer instructions and a termination clause.

C. A provision for the unregulated entity to conduct its own risk assessment.

D. A lower threshold for reporting suspicious transactions.

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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.

A. 1, 2 and 3 only

B. 1, 2 and 4 only

C. 2, 3 and 4 only

D. All of the above

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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.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. All of the above

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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.

A. 1, 2 and 3 only

B. 1, 3 and 4 only

C. 2, 3 and 4 only

D. All of the above

RBI KYC Guidelines MCQs – 67 Most Expected Questions ⏳ Updated: Aug 2026 | 🎯 67 MCQs

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