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    Question

    What is the purpose of performing Due Diligence by banks

    under KYC norms?
    A To detect forgery Correct Answer Incorrect Answer
    B To assess credit risk Correct Answer Incorrect Answer
    C To avoid customer complaints Correct Answer Incorrect Answer
    D To calculate taxes Correct Answer Incorrect Answer
    E To reduce operational costs Correct Answer Incorrect Answer

    Solution

    Due diligence helps banks understand the nature and background of customers, including their financial standing and intent, helping assess potential credit or fraud risks. It's a key part of the risk-based KYC process.

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