📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!
  • google app store apple app store
    • ✖

      Question

      In the context of Anti-Money Laundering (AML) and KYC

      norms, which of the following best defines a "Shell Bank"?
      A A bank established specifically to fund environmental initiatives. Correct Answer Incorrect Answer
      B A bank that operates strictly online with no physical branch network but is heavily regulated. Correct Answer Incorrect Answer
      C A bank incorporated in a jurisdiction where it has no physical presence and is unaffiliated with a regulated financial group. Correct Answer Incorrect Answer
      D A temporary banking structure set up during national emergencies. Correct Answer Incorrect Answer
      E A subsidiary of a central bank used to hold excess foreign reserves. Correct Answer Incorrect Answer

      Solution

      Shell banks are considered high-risk for money laundering because they lack a physical presence in the country of incorporation and are not part of a supervised financial conglomerate. Indian banks are prohibited from maintaining correspondent relationships with them.

      Practice Next
      More Previous Year Paper Questions

      Relevant for Exams:

      ask-question