Banking · Anti-Money Laundering (AML)

Consider the following statements regarding the operational implementation of Risk Categorization and Transaction Monitoring in the context of AML guidelines. Statement 1: Banks are mandated to categorize their customers into Low, Medium, and High-risk categories based on various parameters such as identity, social/financial status, and location. Statement 2: High-risk customers include PEPs, non-resident customers, trusts, charities, NGOs, and firms with sleeping partners. Statement 3: The risk categorization of every customer must be reviewed periodically, with the RBI suggesting a review at least once every six months for all categories. Statement 4: Transaction monitoring requires the use of automated systems in all banks regardless of their size. Statement 5: For high-risk accounts, the bank must perform Enhanced Due Diligence (EDD), involving deeper scrutiny into the source of wealth. Statement 6: The bank's internal threshold for generating alerts must be kept confidential from customers and frontline staff to prevent tipping-off. Statement 7: If a transaction is flagged as suspicious, the bank has a maximum of 30 days to investigate, and during this investigation, the account must be suspended. Which evaluation of these statements is correct according to the regulatory framework?