Banking · Anti-Money Laundering & KYC Norms

Statement 1: For the purpose of KYC, a 'Customer' is defined as a person who maintains an account with the bank, or has a business relationship with the bank, and also includes a person on whose behalf the account is maintained, such as the beneficial owner of a legal entity. This definition extends to beneficiaries of transactions conducted by professional intermediaries like Chartered Accountants or Solicitors, and any person or entity connected with a financial transaction which can pose significant reputational or other risks to the bank. Statement 2: The operational requirement for 'Enhanced Due Diligence' (EDD) is triggered for accounts that are categorized as high risk, which includes non-resident customers, high net worth individuals, trusts, charities, NGOs, and companies having close family shareholding or beneficial ownership. EDD measures involve more frequent periodic updation of KYC, higher levels of scrutiny of transactions, and obtaining additional information about the customer's source of wealth and the purpose of the intended nature of the business relationship. Statement 3: In the event of a change in the risk categorization of a customer from low or medium to high risk, the bank must immediately notify the customer and perform a fresh KYC verification within thirty days of the risk reassessment. Failure to complete this process within the timeframe must lead to the immediate closure of the account to prevent any potential money laundering activities through the bank's infrastructure. Which statement correctly identifies the operational triggers and requirements for Enhanced Due Diligence as per the regulatory guidelines?