Question: What Is High Risk KYC?

Which banking products are at the highest risk?

Card-present transactions are lowest in risk while card-not-present (CNP) transactions get progressively riskier.

Subscriptions or recurring billing are considered some of the highest risk.

Annual billing is of particular interest to the banks..

What are the 5 high risk customer groups?

People at risk include:Adults age 65 and older.Children younger than 5 years.People whose immune systems are weakened due to illness or medical treatment.Pregnant women.

What is a high risk customer?

Higher Risk Customers are those who are engaged in certain professions or avail the banking products and services where money laundering possibilities are high. … Financial Institutions conduct enhanced due diligence (EDD) and ongoing monitoring for the higher risk customers.

When should KYC be done?

KYC is required to be done once in every two years for high risk customers, once in every eight years for medium risk customers and once in every ten years for low risk customers. This exercise would involve all formalities normally taken at the time of opening the account.

What is a high risk workplace?

A high-risk workplace is one where the nature of the work involves high-risk activities and processes – for example, major hazards facilities, construction sites, or sites with mobile plant.

What is the KYC process?

KYC means Know Your Customer and sometimes Know Your Client. KYC or KYC check is the mandatory process of identifying and verifying the identity of the client when opening an account and periodically over time. In other words, banks must make sure that their clients are genuinely who they claim to be.

Is KYC verification safe?

Currently, the most common Paytm fraud is the KYC scam. Hackers are stealing account related details in the name of KYC verification. Many times, they ask users to download Team Viewer through which hackers can see the screen of the phone. Then the hackers tell users to log out of the Paytm app and log in again.

What is CDD in KYC?

Customer Due Diligence (CDD) or Know Your Customer (KYC) policies are the cornerstones of an effective AML/CTF program. Put simply, they are the act of performing background checks on the customer to ensure that they are properly risk assessed before being onboarded.

What is required for KYC?

Generally an identity proof with photograph and an address proof are the two basic mandatory KYC documents that are required to establish one’s identity at the time of opening of savings bank account, fixed deposit, mutual fund, insurance, etc. Why are KYC documents required?

What is KYC risk classification?

RBI “KYC” guidelines require classification of a/cs under “High Risk”, Medium Risk” and “Low Risk” depending on the risk factors underlying customer profile. This enables monitoring of the transactions on a regular basis and make necessary enquiries clarifying the doubts.

Why are PEPs high risk?

PEPs are higher-risk clients for institutions and financial firms to onboard, simply because they are exposed to more opportunities to accept bribes, be involved in corruption by virtue of their position and launder money.

What documents are required for KYC?

KYC Documents IndividualsPassport.Voter’s Identity Card.Driving Licence.Aadhaar Letter/Card.NREGA Card.PAN Card.

What is PEP KYC?

In basic terms, a Politically Exposed Person is someone who, through their prominent position or influence, is more susceptible to being involved in bribery or corruption.

What are the 3 types of risks?

Widely, risks can be classified into three types: Business Risk, Non-Business Risk, and Financial Risk.

What is a high risk transaction?

The definition of high risk transactions are dealings you enter into where there is a large chance of loss. An example of high risk transactions is when you buy junk bonds where there’s a good chance you will lose all of your money. noun.

Is KYC mandatory?

KYC is one such method which ensures that banks are not used for carrying out money laundering activities. KYC came into existence in 2002 in India and RBI, in 2004, made it mandatory for all banks to carry out KYC of customers by December 2005.

What is red flag in KYC?

The report identifies 42 ‘Red Flag Indicators’ or warning signs of money laundering and terrorist financing. Red flags. It is important to be aware of, and act properly upon, red flag indicators that a transaction may be suspicious.

What are the high risk industries?

High-Risk IndustriesBanking Industry.Currency Exchange (MSB)Money Transfer (Remittance)Payment Industry.Casinos & Gaming Industry.Investment Industry.Real Estate Industry.Insurance Industry.

What is EDD in KYC?

Enhanced due diligence (EDD) is a KYC process that provides a greater level of scrutiny of potential business partnerships and highlights risk that cannot be detected by customer due diligence. EDD goes beyond CDD and looks to establish a higher level of identity assurance by obtaining the customer’s identity and …

How do you identify a pep?

FATF Recommendation 12 defines a PEP as being someone who has been (but may no longer be) entrusted with a prominent public function. The language of Recommendation 12 is consistent with a possible open-ended approach (i.e. “once a PEP–could always remain a PEP”).

What is KYC risk management?

Know Your Customer (KYC) procedures are a critical function to assess customer risk and a legal requirement to comply with Anti-Money Laundering (AML) laws. Effective KYC involves knowing a customers identity, their financial activities and the risk they pose.