AML and CFT Compliance
This domain tests the branch's role in the Prevention of Money Laundering Act, 2002 (PMLA) and counter-terrorist financing: reporting to FIU-IND, sanctions screening, and preserving evidence without alerting the customer.
Core rules
- PMLA obligations run through the Principal Officer and a designated director; branches feed them accurate reports.
- Suspicious Transaction Reports (STRs) have no monetary threshold and cover attempted transactions; Cash Transaction Reports (CTRs) cover cash above ₹10 lakh; other reports apply as prescribed.
- Screen customers and beneficial owners against UNSC 1267 and other targeted sanctions lists; a match requires freezing without prior notice and immediate escalation.
- Do not tip off the customer; retain records for five years.
- CFT includes terrorist-financing and proliferation-financing risk, not only drug proceeds.
Worked example
A customer receives several small inward remittances from a high-risk jurisdiction and withdraws cash almost immediately. The pattern suggests structuring and layering. The branch should file an STR, continue monitoring, and not tell the customer. The amount alone does not decide the case.
Traps
Filing only above a threshold; tipping off; screening only at onboarding; ignoring beneficial owners; treating an attempted transaction as non-reportable.