Core Principles for Effective Banking Supervision

Question 1

When was it published

Answer 1

1997

Question 2

what did Core Principles for Effective Banking Supervision urged

Answer 2

urged nations adopt FATF’s 40 Recommendations

Question 3

Whoes assistance was taken for preparation of Core Principles for Effective Banking Supervision

Answer 3

assistance of 15

non-G-10 nations, including Brazil, Chile, Hong Kong, Mexico, Russia, Singapore and Thailand.

Question 4

use of due diligence requirements to can mitigate

Answer 4

dangers of bad customers

Question 5

Without due diligence banks can be subject to

Answer 5

banks can be subject to reputational, operational,

legal and concentration risks,

Question 6

what issues were emphasized in the paper “Customer Due Diligence for Banks.”-1

Answer 6

1)Key Elements of the Kyc
2) Banks should not only establish the identity of their customers, but should also monitor account
activity to identify transactions
3) Numbered accounts should not be prohibited but be subjected to exactly the same KYC proce-
dures as other customer accounts

Question 7

what issues were emphasized in the paper “Customer Due Diligence for Banks.”-2

Answer 7

Bank regulators should ensure that bank staff follow KYC procedures, review customer files and
a sampling of accounts, and emphasize that they will take “appropriate action” against officers
who fail to follow KYC procedures

Internal auditors and compliance officials should regularly monitor staff performance and adher-
ence to KYC procedures.

Periodic bank-wide employee training should be provided that explains the importance of the
KYC policies and AML requirements.

Question 8

what issues were emphasized in the paper “Customer Due Diligence for Banks.”-3

Answer 8

continued monitoring of high-risk accounts by compliance personnel

Banks should use standard identification procedures when dealing with “non-face-to-face”
customers and should never agree to open an account for persons who are adamant about
anonymity.

Question 9

what issues were emphasized in the paper “Customer Due Diligence for Banks.”-4

Answer 9

Banks should make every effort to know the identity of corporations that operate accounts and
when professional intermediaries are involved, should verify the exact relationship between the
owners and intermediary

anks should develop customer acceptance policies and proceduresshould develop
clear and concise descriptions of who is an acceptable customer

Question 10

what are four key elements of a KYC program in Customer Due Diligence for Banks

Answer 10

1. Customer identification.
2. Risk management.
3. Customer acceptance.
4. Monitoring.

Question 11

per Customer Due Diligence for Banks what are the Specific customer identification issues related to higher-risk customers-1

Answer 11

Client accounts opened by professional intermediaries, such as “pooled” accounts managed
by professional intermediaries on behalf of entities such as mutual funds, pension funds and
money funds.

Corporate vehicles, particularly companies with nominee shareholders or entities with
shares in bearer form.

Question 12

per Customer Due Diligence for Banks what are the Specific customer identification issues related to higher-risk customers-2

Answer 12

Trust, nominee and fiduciary accounts.
Politically exposed persons.
— Non-face-to-face customers (i.e., customers who do not present themselves for a personal
interview).
— Correspondent banking.

Question 13

account opening and customer identification guidelines, when was it issued

Answer 13

2003

Question 14

rigorous customer due diligence standards per account opening and customer identification guidelines should be follwed by

Answer 14

banks, non-bank financial institutions

and professional intermediaries of financial services, such as lawyers and accountants.

Question 15

Consolidated KYC Risk Management -2004 covered

Answer 15

the critical elements for effective management of KYC risk throughout
a banking group and addresses the need for banks to adopt a global approach and to apply the
elements necessary for a sound KYC program to both the parent bank or head office and all of its
branches and subsidiaries. These elements consist of risk management, customer acceptance and
identification policies, and ongoing monitoring of higher-risk accounts.