Question

The Reserve Bank of India has revised its master direction on Know Your Customer (KY

Q: Answer-The Reserve Bank of India has revised its master direction on Know Your Customer (KYC) for regulated...

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 sanctionedcommitted 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 recalledforeclosure initiated by the bank.

C 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

B To regularly change the customer's risk profile

C To increase the source of funds or wealth

D To introduce new products and services to the customer

E To verify the CEO's identity regularly

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