The Basel Committee on Banking Supervision issued a paper in October 2001 in which it presented a Know Your Customer framework and recommended standards applicable to

Question

Options

• AOffshore banking supervisors.
• BFinancial Intelligence Units.
• Cbanks in all countries.
• DEuropean Financial Institutions.

• A
  4% (2)
• B
  6% (3)
• C
  76% (37)
• D
  14% (7)

Explanation

The Basel Committee on Banking Supervision (BCBS) issued a paper in October 2001 titled Customer due diligence for banks, which outlined four essential elements of a sound Know Your Customer (KYC) programme. These elements are: customer acceptance policy, customer identification, on- going monitoring of higher risk accounts, and risk management. The paper also recommended that these standards should be applicable to all banks in all countries, regardless of their size, nature, or location. The paper stated that "KYC safeguards go beyond simple account opening and record- keeping and require banks to formulate a customer acceptance policy and a tiered customer identification programme that involves more extensive due diligence for higher risk accounts, and includes proactive account monitoring for suspicious activities.

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