Banking · Principles and Practices of Banking
A customer frequently deposits amounts just under Rs. 49,000 over several days to avoid PAN reporting thresholds. Furthermore, he asks the branch manager to keep a personal box of gold ornaments in his office drawer for 'safekeeping' without entering it into the bank's locker records, offering a personal tip. Based on the Principles and Practices of Banking (PPB) and the anti-money laundering framework, what is the most appropriate response by the branch manager?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Close the customer's account immediately without giving any reason and keep the gold box as a security deposit against future losses.
- 2Instruct the customer to deposit all the cash at once so the bank can charge a higher fee and then accept the gold box as a personal favor.
- 3Refuse the gold box, explain that the bank only accepts items via the official locker system, and report the suspicious cash transactions as potential 'smurfing' to the Principal Officer.✓
- 4Accept the personal tip and the gold box to maintain a good relationship with a long-term customer and ignore the cash deposits as they are under the threshold.
Correct answer
Refuse the gold box, explain that the bank only accepts items via the official locker system, and report the suspicious cash transactions as potential 'smurfing' to the Principal Officer.
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