What is EDD in KYC process?
Enhanced Due Diligence (EDD) is the KYC process of gathering data and information to verify the identity of clients, but with additional information required to mitigate the risk associated with the client.
EDD also requires “reasonable assurance” when calculating a KYC risk rating..
What is CDD in KYC process?
Customer Due Diligence (CDD) or Know Your Customer (KYC) policies are the cornerstones of an effective AML/CTF program. Put simply, they are the act of performing background checks on the customer to ensure that they are properly risk assessed before being onboarded.
What triggers KYC?
Effective KYC involves knowing a customers identity, their financial activities and the risk they pose. Do you know your customer? At any rate, you ought to. If you’re a financial institution (FI), you could face possible fines, sanctions, and reputational damage, if you do business with a money launderer or terrorist.
What is a KYC package?
KYC Package means the documentation and other information requested by the Administrative Agent or any Affected Person in any KYC Request.
What is CDD SDD EDD?
CDD is essential for KYC, and although these processes differ around the globe, they have a single aim—to identify your customer and their activities. Then customer’s risk profile is assessed and followed by basic Customer Due Diligence, Enhanced Due Diligence (EDD) or Simplified Due Diligence (SDD).
What are the 3 components of KYC?
The 3 steps of a KYC compliance frameworkCustomer Identification. Before checking a customer’s identification documents, it’s necessary to verify their and scrutinise all available information for any inconsistencies. … Customer Due Diligence (CDD) … Enhanced Due Diligence (EDD)
How can I do KYC in bank?
The customer needs to submit self attested copies of acceptable residential address proof and identity proof. Submission of documents and KYC form can be done physically by visiting the bank branch or by scanning the documents and uploading the same on the Net banking portal.
What is difference between CDD and EDD?
It is a rapid fire due diligence screening process. … The second step is Customer Due Diligence (“CDD”) which requires the bank to obtain information to verify the customer’s identity and assess the risk. If the CDD inquiry leads to a high risk determination, the bank has to conduct an Enhanced Due Diligence (“EDD”).
What documents do I need for EDD?
Primary DocumentsDriver license (US or foreign)Passport or passport card (US or foreign)US Permanent Resident Card (I-551)Employment Authorization Card (I-766) issued by the United States Citizenship and Immigration Services.Certificate of Naturalization (Form N-550 or N-570)Federal or state ID.More items…•Mar 19, 2021
What is the CDD rule?
The CDD Rule requires that financial institutions maintain “appropriate risk-based procedures for conducting ongoing customer due diligence,” including “[u]nderstanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile” and “[c]onducting ongoing monitoring to …
Is CDD the same as KYC?
What’s the difference between KYC and CDD? CDD (Customer Due Diligence) is the process of a business verifying the identity of its clients and assessing the potential risks to the business relationship. KYC is about demonstrating that you have done your CDD. Both KYC and CDD are integral to the AML process.
Is AML and KYC same?
The difference between AML and KYC is that AML (anti-money laundering) is an umbrella term for the range of regulatory processes firms must have in place, whereas KYC (Know Your Customer) is a component part of AML that consists of firms verifying their customers’ identity.
Are KYC Safe?
As per the guidelines of RBI (Reserve Bank Of India) all customer of any wallet or bank who want to use for higher balance (Limit will increases) for sending money or for another purpose. It is safe to provide these details. KYC stands for Know Your Customer.
What are the 3 stages of money laundering?
There are usually two or three phases to the laundering:Placement.Layering.Integration / Extraction.
What is KYC risk classification?
RBI “KYC” guidelines require classification of a/cs under “High Risk”, Medium Risk” and “Low Risk” depending on the risk factors underlying customer profile. This enables monitoring of the transactions on a regular basis and make necessary enquiries clarifying the doubts.