Question 1. What Is Kyc? Why Is It Required?
KYC approach “Know Your Customer”. It is a method by way of which banks gain records approximately the identification and address of the customers. This system helps to make sure that banks’ services aren't misused. The KYC procedure is to be finished via the banks while starting debts. Banks also are required to periodically update their customers’ KYC details.
Question 2. What Are The Kyc Requirements For Opening A Bank Account?
To open a financial institution account, one wishes to put up a ‘evidence of identity and evidence of address’ together with a recent photograph.
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Question three. What Are The Documents To Be Given As ‘evidence Of Identity’ And ‘evidence Of Address’?
The Government of India has notified six files as ‘Officially Valid Documents’ (OVDs) for the reason of producing proof of identity. These six documents are Passport, Driving Licence, Voters’ Identity Card, PAN Card, Aadhaar Card issued by UIDAI and NREGA Job Card. You need to submit any person of these documents as evidence of identity. If those documents also include your deal with information, then it would also be general as ‘evidence of cope with’. If the report submitted through you for evidence of identification does now not include deal with info, then you will need to post every other formally legitimate document which includes cope with info.
Question four. If I Do Not Have Any Of The Documents Listed Above To Show My ‘proof Of Identity’, Can I Still Open A Bank Account?
Yes. You can nevertheless open a financial institution account called ‘Small Account’ by means of submitting your current photo and placing your signature or thumb influence inside the presence of the bank official.
Question five. Is There Any Difference Between Such ‘small Accounts’ And Other Accounts?
Yes. The ‘Small Accounts’ have sure barriers along with:
stability in such accounts at any point of time must now not exceed Rs.50,000
total credit in twelve months should not exceed Rs.1,00,000
general withdrawal and transfers in a month have to not exceed Rs.10,000
Foreign remittances can't be credited to such accounts.
Such bills continue to be operational first of all for a length of 12 months and thereafter, for a similarly length of twelve months if the holder of such an account provides proof to the bank of getting implemented for any of the officially legitimate documents within 365 days of the hole of such account.
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Question 6. Would It Be Possible, If I Do Not Have Any Of The Officially Valid Documents, To Have A Bank Account, Which Is Not Subjected To Any Limitations As In The Case Of ‘small Accounts’?
A normal account may be opened by way of submitting a replica of anybody of the following documents as Proof of Identity (PoI):
Identity card with character’s picture issued by using Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions;
letter issued through a gazetted officer, with a duly attested photograph of the man or woman.
For Proof of Address (PoA), you can put up the subsequent documents:
Utility bill, which isn't always greater than months old, of any service provider (electricity, cellphone, post-paid cell phone, piped fuel, water bill);
Property or Municipal Tax receipt;
Bank account or Post Office savings financial institution account statement;
Pension or circle of relatives Pension Payment Orders (PPOs) issued to retired personnel by means of Government Departments or Public Sector Undertakings, in the event that they include the deal with;
Letter of allotment of accommodation from company issued with the aid of State or Central Government departments, statutory or regulatory our bodies, public sector undertakings, scheduled business banks, monetary institutions and listed organizations. Similarly, depart and license agreements with such employers allotting reputable accommodation; and
Documents issued by Government departments of foreign jurisdictions or letter issued via Foreign Embassy or Mission in India.
This, but, isn't always a fashionable rule and it's miles left to the judgement of the banks to determine whether this simplified technique may be adopted in admire of any consumer.
Question 7. If My Name Has Been Changed And I Do Not Have Any Ovd In The New Name, How Can I Open An Account?
A copy of the wedding certificate issued by way of the State Government or Gazette notification indicating alternate in name collectively with an authorized copy of the ‘Officially Valid Documents’ within the prior name of the man or woman is to be supplied for beginning of account in cases of folks who exchange their names as a consequence of marriage or in any other case.
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Question eight. Are Banks Required To Categorise Their Customers Based On Risk Assessment?
Yes, banks are required to categorise their customers into ‘low’, ‘medium’ and ‘excessive’ chance classes depending on their AML threat evaluation.
Question nine. Do Banks Inform Customers About This Risk Categorisation?
No,financial institution does no longer tell customers approximately this chance categorisation.
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Question 10. If I Refuse To Provide Requested Documents For Kyc To My Bank For Opening An Account, What May Be The Result?
If you do no longer provide the desired documents for KYC, the bank will now not be able to open your account.
Question 11. Can I Open A Bank Account With Only An Aadhaar Card?
Yes, Aadhaar card is general as a evidence of each identity and deal with.
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Question 12. Is It Compulsory To Furnish Aadhaar Card For Opening An Account?
No. You can supply Aadhaar card or any of the other 5 OVDs for beginning an account.
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Question 13. What Is E-kyc? How Does E-kyc Work?
e-KYC refers to electronic KYC.
E-KYC is possible handiest for those who've Aadhaar numbers. While the use of e-KYC carrier, you need to authorise the Unique Identification Authority of India (UIDAI), with the aid of express consent, to release your identity/address through biometric authentication to the financial institution branches/commercial enterprise correspondent (BC). The UIDAI then transfers your records comprising your name, age, gender, and image electronically to the financial institution. Information consequently provided thru e-KYC system is authorized to be handled as an ‘Officially Valid Document’ underneath PML Rules and is a valid process for KYC verification.
Question 14. Is Introduction Necessary While Opening A Bank Account?
No, advent isn't always required.
Question 15. If I Am Staying In Chennai But If My Proof Of Address Shows My Address Of New Delhi, Can I Still Open An Account In Chennai?
Yes. You can open a financial institution account in Chennai although the deal with within the “Officially Valid Document” is that of New Delhi and also you do not have a evidence of deal with for your Chennai cope with. In such case, you may post the officially valid report having your New Delhi deal with, collectively with a assertion about your Chennai cope with for conversation purposes.
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Question sixteen. Can I Transfer My Existing Bank Account From One Place To Another? Do I Need To Undergo Full Kyc Again?
It is viable to transfer an account from one branch to every other department of the same financial institution. There isn't any want to go through KYC exercise again for such switch. However, if there is a change of address, then you will have to submit a statement approximately the modern deal with. If the address acting in the ‘Officially Valid Documents’ (OVDs) submitted for evidence of deal with is now not your valid cope with (i.E. Neither your permanent address nor your contemporary cope with), you want to get an Officially Valid Document for Proof of Address containing the modern-day or the everlasting cope with and grant the identical within six months. In case of beginning an account in some other bank, however, you'll need to undergo KYC workout afresh.
Question 17. Do I Have To Furnish Kyc Documents For Each Account I Open In A Bank Even Though I Have Furnished The Documents Of Proof Of Identity And Address?
No, if you have opened a KYC compliant account with a financial institution, aside from a ‘small account’, then for starting another account with the same financial institution, furnishing of files is not vital.
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Question 18. For Which Banking Transactions Do I Need To Quote My Pan Number?
PAN wide variety desires to be quoted for transactions including account opening, transactions above Rs.50,000 (whether or not in coins or non-coins), and so forth. A full listing of transactions wherein PAN quantity desires to be quoted may be accessed from website of Income Tax Department.
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Question 19. Whether Kyc Is Applicable For Credit/debit Cards?
Yes. KYC workout is necessary for Credit/ Smart Cards and also in appreciate of add-on/ supplementary cards. Since debit cards are issued best to account holders and accounts are opened only after the KYC procedure is finished, there's no want for separate KYC for issuing debit card.
Question 20. I Do Not Have A Bank Account. But I Need To Make A Remittance. Is Kyc Applicable To Me?
Yes. KYC exercising needs to be done for all those who need to make domestic remittances of Rs. 50,000 and above and all overseas remittances.
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Question 21. Can I Purchase A Demand Draft/price Order/travellers Cheque Against Cash?
Yes, Demand Draft/Payment Order/Travellers Cheques for below Rs.50,000/- can be purchased against cash and such contraptions for Rs. 50000/- and above can be issued most effective by means of way of debiting the purchaser's account or towards cheques.
Question 22. Do I Need To Submit Kyc Documents To The Bank While Purchasing Third Party Products (like Insurance Or Mutual Fund Products) From Banks?
Yes, all clients who do not have bills with the bank (known as stroll-in clients) must produce proof of identification and address even as shopping 1/3 birthday party merchandise from banks if the transaction is for Rs.50,000 and above. KYC exercise will not be necessary for bank’s personal customers for buying third party merchandise. However, commands to make charge by means of debit to clients’ bills or in opposition to cheques for remittance of budget/difficulty of guests’ cheques, sale of gold/silver/platinum and the requirement of quoting PAN wide variety for transactions of Rs.50,000 and above may be relevant to buy of 0.33 birthday party products from financial institution with the aid of its clients as also to walk-in clients.
Question 23. My Kyc Was Completed When I Opened The Account. Why Does My Bank Insist On Doing Kyc Again?
Banks are required to periodically replace KYC facts. This is part of their ongoing due diligence on financial institution money owed. The periodicity of such updation varies from account to account relying on its hazard categorisation with the aid of the financial institution. Periodic updation of records also facilitates prevent frauds in customer debts.
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Question 24. What Are The Rules Regarding Periodic Updation Of Kyc?
Different periodicities were prescribed for updation of KYC statistics depending at the chance notion of the financial institution. KYC is needed to be achieved as a minimum once in two years for excessive threat clients, once in eight years for medium threat customers and once in ten years for low hazard clients. This exercise would involve all formalities for KYC commonly taken on the time of establishing the account.
While periodic updation of KYC needs to be executed in appreciate of client labeled as ‘low danger’ also, if there may be no trade in fame with recognize to the identification (change in name, and many others.) and/or deal with of such clients the banks might also ask such customers to submit only a self-certification approximately ‘no-exchange in reputation’ on the time of periodic updation. Banks may not ask such customers to publish copies of ‘Officially Valid Documents’ for periodic updation.
In case of alternate of address of such ‘low chance’ customers, they may merely ahead a licensed reproduction of the document (evidence of deal with) by using mail/publish, and many others. Physical presence of such low hazard customer isn't always required on the time of periodic updation.
Customers who're minors must put up sparkling photograph on becoming main.
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Question 25. What If I Do Not Provide The Kyc Documents At The Time Of Periodic Updation?
If you do not provide your KYC documents on the time of periodic updation, financial institution has the choice to close your account. Before final the account, the bank may additionally, but, impose ‘partial freezing’ (i.E. First of all permitting all credit and disallowing all debits while giving an choice to you to shut the account and take your money back). Later, even credit also might not be allowed. The ‘partial freezing’ however, would be exercised through the bank after supplying you with due note.
Question 26. How Is Partial Freezing Imposed?
Partial freezing is imposed within the following methods:
Banks need to supply due word of 3 months to start with to the customers earlier than exercising the option of ‘partial freezing’.
After that a reminder for similarly duration of 3 months will be issued.
Thereafter, banks shall impose ‘partial freezing’ by using permitting all credit and disallowing all debits with the freedom to shut the accounts.
If the money owed are nonetheless KYC non-compliant after six months of enforcing preliminary ‘partial freezing’ banks shall disallow all debits and credit from/to the bills, classifying them inoperative.
Meanwhile, the account holders can revive accounts by way of filing the KYC documents.
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