New Enroll for RBI, PFRDA & NABARD Intro Class! April 18 at 9:15 PM

    Question

    The Reserve Bank of India has revised its master

    direction on Know Your Customer (KYC) for regulated entities to incorporate amendments to the Prevention of Money Laundering rules. What is the purpose of "Ongoing Due Diligence" as per the amendments to the KYC rules?
    A To ensure that transactions in the account are consistent with the customer's business Correct Answer Incorrect Answer
    B To regularly change the customer's risk profile Correct Answer Incorrect Answer
    C To increase the source of funds or wealth Correct Answer Incorrect Answer
    D To introduce new products and services to the customer Correct Answer Incorrect Answer
    E To verify the CEO's identity regularly Correct Answer Incorrect Answer

    Solution

    The Reserve Bank of India (RBI) has imposed penalties on two private-sector lenders – ICICI Bank and Kotak Mahindra Bank. ICICI Bank was fined Rs 12.19 crore as the regulator found from its Inspections for Supervisory Evaluation (ISE) for its financial position as on March 31, 2020, and March 31, 2021, that the bank sanctioned/committed loans to firms in which two of its directors were also directors.   ICICI Bank was also found marketed and engaged in the sale of non-financial products and failed to report frauds to the RBI within the prescribed timelines.   Kotak Mahindra Bank was fined Rs 3.95 crore as it levied foreclosure charges despite there being no clause in the loan agreement for levy of prepayment penalty on loans recalled/foreclosure initiated by the bank.

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