Banking · Know Your Customer (KYC)
A private company has a complex shareholding structure spanning offshore entities, and one individual investor is the daughter of a former foreign Cabinet Minister (a PEP relative). The company approaches a bank to open a corporate account. The complex structure makes it difficult to pinpoint any single individual holding more than 10% of the shares directly. How should the bank navigate the compliance requirements for this onboarding process?
- 1Ask the company to restructure its shareholding to remove the offshore entity before the bank can consider opening the account, as per standard RBI strictures.
- 2Open the account as a regular corporate account since the company is registered in India and has a valid PAN, provided no transactions are allowed from offshore jurisdictions.
- 3Apply Enhanced Due Diligence, identify the daughter of the former minister as a PEP-related individual, seek approval from the bank's Senior Management, and identify the Senior Managing Official of the company as the Beneficial Owner if no 10% shareholder is identified.✓
- 4Decline the account opening immediately because the presence of a foreign politician's relative and an offshore holding company represents an unacceptable risk of money laundering.
Correct answer
Apply Enhanced Due Diligence, identify the daughter of the former minister as a PEP-related individual, seek approval from the bank's Senior Management, and identify the Senior Managing Official of the company as the Beneficial Owner if no 10% shareholder is identified.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Preparing for Banking?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Want more practice questions on Know Your Customer (KYC)?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Banking · Know Your Customer (KYC)