Glossary

A Key Risk Indicator (KRI) is a measurable value used to assess the potential that the probability and impact of a risk event may exceed an organization's defined risk appetite. When triggered, KRIs signal emerging threats that could significantly hinder the organization's ability to achieve its objectives.

Key Risk Indicators (KRIs) are measurable values used to signal potential risk events before they happen. They help organizations monitor changes in risk exposure and provide early warnings to take preventive action. KRIs are aligned with key objectives and risk appetite, making them essential for proactive risk management and informed decision-making.

Keyloggers, also known as keystroke loggers, are tools that record the keys pressed on a system and save them to a file. This file is then accessed by the person using the malware to gather sensitive information. Keyloggers can be either software-based or hardware-based. Their primary use is to steal passwords and other confidential details, such as bank account information.

A kickback is an illegal payment given in return for favorable treatment or improper services. It can involve money, gifts, or anything of value. Kickbacks undermine impartial decision-making by employees or public officials and are considered a form of bribery. This corrupt practice distorts fair processes and compromises integrity in both public and private sectors.

Kickbacks are illegal payments made as a reward for facilitating a transaction or securing business. They usually involve a portion of the earnings being secretly returned to an individual or organization to influence decisions unfairly. Kickbacks undermine fair competition and are considered a form of bribery and corruption.

U.S. law against key foreign narcotics traffickers.

A government or state where officials use their power to steal national resources and wealth, often involving large-scale corruption and money laundering.

Verified and watched businesses as customers for compliance.

Know Your Customer (KYC) is a regulatory and compliance process used by financial institutions and businesses to verify the identity of clients. It involves collecting and analyzing information such as identification documents, ownership structures, and the purpose of transactions. KYC is essential for preventing money laundering, terrorist financing, and sanctions violations.

Employee authentication and monitoring to avoid internal fraud and abuse.

Regulatory process for client identification to avoid financial crime.

Before activating a demat account, DPs must complete KYC compliance as per SEBI guidelines. This includes collecting identity proof, address, and documentation like PAN and official ID, preventing fraud.

This Master Circular consolidates RBI’s “Know Your Customer,” Anti-Money Laundering, Combating Financing of Terrorism, and PMLA guidelines issued up to June 30, 2008. Aimed at banks and financial institutions, it sets mandatory customer identification, record-keeping, risk-assessment, and suspicious transaction reporting frameworks to combat money-laundering and terrorist financing risks.

These RBI Directions updated Know Your Customer norms in line with global AML/CFT standards. They require regulated entities to strengthen internal audits, monitor high-risk accounts, and ensure subsidiaries abroad match stricter KYC measures if host regulations are weaker, thereby fortifying customer due diligence and international anti-financial crime compliance.

Process to refresh/cleanse KYC records to current risk levels.

Common platforms for KYC so that institutions can view standardized due diligence customer data.

This circular compiles Know Your Customer, Anti-Money Laundering, Combating Financing of Terrorism, and PMLA guidelines for banks and NBFCs. It mandates customer due diligence, transaction record-keeping, risk profiling, and suspicious transaction reporting to prevent financial crimes and terrorism financing. It remains a cornerstone of India’s regulatory framework.

PFRDA’s August?2023 circular introduces a new AML obligation: when a Point-of-Presence (POP) suspects laundering/Terror Financing and believes continuing Customer Due Diligence will tip-off the client, they must halt CDD and file a Suspicious Transaction Report (STR) to FIU?IND without alerting the client, ensuring AML control without alerting suspects.