Banking Law, AML/CFT and KYC
This domain rewards precise knowledge of obligations rather than general awareness. Understand the anti-money-laundering cycle - placement, layering and integration - and where each stage is typically detected. Know customer due diligence, enhanced due diligence for high-risk customers, beneficial ownership identification, politically exposed persons, suspicious transaction reporting, currency transaction thresholds, record retention, and the role of the financial intelligence unit.
Know the difference between a suspicious transaction report and a threshold-based report: the first is judgement-driven and triggered by unusual behaviour, the second by size. Know that tipping off a customer about a report is prohibited. Understand sanctions screening and the duty to freeze or reject matched transactions.
Traps are frequent. A question may describe a customer who refuses to provide identification and ask whether the bank should proceed - the answer is no, and the relationship should not be established. Another trap confuses the reporting obligation with a duty to investigate; the bank reports, the authorities investigate.
Rule of thumb: if you cannot explain the source of funds, you cannot accept the funds. Documentation before relationship, always.
Worked example: A walk-in customer deposits cash just below the reporting threshold in three separate branches on the same day. Structuring is the red flag; the correct response is to file a suspicious transaction report, not merely to record the deposits.