Question: Who Are Medium Risk Customers?

What is a 5×5 risk matrix?

The matrix works by selecting the appropriate consequences from across the bottom, and then cross referencing against the row containing the likelihood, to read off the estimated risk rating.

Two examples of risk assessment matrix 5×5 using different axis labels.

Faults in the 5×5 matrix..

What is considered a high risk merchant?

A merchant is usually classified as high-risk if the industry has a higher risk of fraud and chargebacks. The two highest-risk accounts are adult material or pornography and online gambling. Both industries require high risk merchant accounts. There are many other businesses classified as moderate risk.

What are high risk industries?

High-Risk industries involve massive risk for all the three parties which are the buyer, seller, and the financial institution. … Definition, Government and financial institutions term industries that attract a high number of commercial disputes and legal restrictions as High-Risk.

What are the 3 types of risks?

Widely, risks can be classified into three types: Business Risk, Non-Business Risk, and Financial Risk.

What are examples of risks?

Examples of uncertainty-based risks include:damage by fire, flood or other natural disasters.unexpected financial loss due to an economic downturn, or bankruptcy of other businesses that owe you money.loss of important suppliers or customers.decrease in market share because new competitors or products enter the market.More items…•

What are the four key elements of a KYC policy?

Banks should frame their KYC policies incorporating the following four key elements: Customer Acceptance Policy; Customer Identification Procedures; Monitoring of Transactions; and.

Who are the high risk customers?

Higher Risk Customers are those who are engaged in certain professions or avail the banking products and services where money laundering possibilities are high. Financial Institutions conduct enhanced due diligence (EDD) and ongoing monitoring for the higher risk customers.

What is the period of re KYC for medium risk category customers?

According to the RBI, those categoised as low-risk customers should be asked to update KYC details once in 10 years, for medium risk once in 8 years and for high-risk customers once in two years. This would involve providing identification and address proof.

What are the three 3 components of KYC?

To create and run an effective KYC program requires the following elements: Customer Identification Program (CIP) How do you know someone is who they say they are? … Customer Due Diligence. … Ongoing Monitoring.

Is KYC mandatory?

KYC is one such method which ensures that banks are not used for carrying out money laundering activities. KYC came into existence in 2002 in India and RBI, in 2004, made it mandatory for all banks to carry out KYC of customers by December 2005.

What is the safest type of business to start?

If you want to ensure the security of your future and the future of your potential business, consider starting one of these seven lower-risk businesses.Consulting. … Tutoring. … Virtual assistant. … Direct sales. … Drop-shipping. … Service business. … Senior care.

What are the 3 levels of risk?

1.3 Risk levels We have decided to use three distinct levels for risk: Low, Medium, and High.

What are the 4 types of risk?

One approach for this is provided by separating financial risk into four broad categories: market risk, credit risk, liquidity risk, and operational risk.

How can you avoid financial risk?

Here are some of the most common ways you can properly manage financial risk:Carry the proper amount of insurance.Maintain adequate emergency funds.Diversify your investments.Have a second source of income.Have an exit strategy for every investment you make.Maintain your health.Always read the fine print.More items…•

What are the 4 principles of risk management?

Four principles Accept risk when benefits outweigh the cost. Accept no unnecessary risk. Anticipate and manage risk by planning. Make risk decisions in the right time at the right level.

What is a low risk customer?

Low Risk (Level I) Individuals (other than High Net Worth) and entities whose identities and sources of wealth can. be easily identified and transactions in whose accounts by and large conform to the known profile. may be categorized as low risk. Examples of low risk customers may be salaried.

What are the 10 P’s of risk management?

These risks include health; safety; fire; environmental; financial; technological; investment and expansion. The 10 P’s approach considers the positives and negatives of each situation, assessing both the short and the long term risk.

What is a high risk business activity?

business activities: cash-based businesses; money service bureaus; arms dealers; and property transactions with unclear source of funds; foreign politically exposed person; new clients carrying out one-off transactions; … the client has multiple bank accounts or foreign accounts with no good reason; or.