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100+ Free IIBF AML/KYC Practice Questions

Pass your IIBF Certificate Examination in AML and KYC (India) exam on the first try — instant access, no signup required.

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2026 Statistics

Key Facts: IIBF AML/KYC Exam

120 MCQs / 100 marks

Official IIBF AML/KYC paper structure

IIBF Rules & Syllabus 2026

60/100

Minimum passing score

IIBF Rules & Syllabus 2026

2 hours

Exam duration; no negative marking

IIBF Rules & Syllabus 2026

₹1,100 / ₹1,600

IIBF Member / Non-member fee per attempt

IIBF Rules & Syllabus 2026

5 years

Minimum record-keeping retention under PMLA

PMLA 2002 Section 12

7 days

STR submission timeline to FIU-IND after suspicion conclusion

PMLA Rules / RBI Guidelines

IIBF AML/KYC certificate: 120 MCQs for 100 marks in 2 hours, English, remote-proctored, no negative marking; pass at 60/100. Fees ₹1,100 (members) / ₹1,600 (non-members) per attempt + taxes. Eligibility: 12th pass/equivalent or IIBF BC/BF.

Sample IIBF AML/KYC Practice Questions

Try these sample questions to test your IIBF AML/KYC exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which of the following describes the 'Placement' stage in the money laundering process?
A.Distributing laundered funds into various legitimate assets to integrate them into the economy
B.Moving funds through multiple banks to obscure the audit trail and hide source
C.Introducing illegal cash proceeds directly into the formal financial system
D.Investing the integration yields into stocks, real estate, and government bonds
Explanation: Placement is the initial stage of money laundering, where cash generated from illegal activities is converted into monetary instruments or deposited directly into financial institutions to enter the financial system.
2What is the primary objective of the 'Layering' stage in money laundering?
A.To physically move cash across international borders through couriers
B.To separate illicit proceeds from their source by creating complex layers of financial transactions
C.To return the laundered funds to the criminal with an apparent legal origin
D.To convert bank deposits back into cash for immediate consumption
Explanation: Layering involves separating the illicit proceeds from their illegal source through a series of complex, structured financial transactions designed to obscure the audit trail and mask the origin of the funds.
3Under Section 3 of the Prevention of Money Laundering Act (PMLA), 2002 in India, who can be charged with the offence of money laundering?
A.Only the individual who directly commits the scheduled offence
B.Only the person who receives the final integrated funds in a bank account
C.Any person who directly or indirectly attempts, assists, or is party to any activity connected with the proceeds of crime
D.Only financial institution compliance officers who fail to detect suspicious transactions
Explanation: Section 3 of the PMLA defines the offence of money laundering broadly: whosoever directly or indirectly attempts to indulge, knowingly assists, knowingly is a party, or is actually involved in any process or activity connected with the proceeds of crime, including its concealment, possession, acquisition, or use, is guilty of the offence.
4What is the standard punishment for committing the offence of money laundering under Section 4 of the PMLA, 2002?
A.Rigorous imprisonment for 1 to 5 years and a fine up to ₹1 lakh
B.Rigorous imprisonment for 3 to 7 years and a liability to fine
C.Simple imprisonment for 2 to 5 years with no provision for fines
D.Imprisonment for life and confiscation of all ancestral property
Explanation: Section 4 of the PMLA prescribes rigorous imprisonment for a term which shall not be less than 3 years but which may extend to 7 years, along with a fine. There is no ceiling on the fine amount under the current amended act.
5If the offence of money laundering is linked to scheduled crimes listed under the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985, what is the maximum imprisonment term under Section 4 of the PMLA?
A.Up to 7 years
B.Up to 10 years
C.Up to 14 years
D.Up to 20 years
Explanation: Where the proceeds of crime involved in money laundering relate to any offence specified under paragraph 2 of Part A of the Schedule (which includes offences under the NDPS Act), the maximum term of rigorous imprisonment can extend to 10 years instead of the standard 7 years.
6In which city is the Secretariat of the Financial Action Task Force (FATF) located, and in what year was the organization established?
A.Geneva, Switzerland; established in 1999
B.London, United Kingdom; established in 1995
C.Paris, France; established in 1989
D.New York, USA; established in 2001
Explanation: The FATF Secretariat is housed at the headquarters of the Organisation for Economic Co-operation and Development (OECD) in Paris, France. The FATF was established in 1989 by a G7 Summit held in Paris.
7What is the total number of standard Recommendations currently issued by the Financial Action Task Force (FATF) for combating money laundering and terrorist financing?
A.40 Recommendations
B.40 + 9 Special Recommendations
C.25 Recommendations
D.50 Recommendations
Explanation: The FATF consolidated its standards into a single set of '40 Recommendations' in 2012, incorporating the previous 9 Special Recommendations on terrorist financing. This remains the international standard.
8Under Section 5 of the PMLA, 2002, who is authorized to order the provisional attachment of property suspected to be proceeds of crime?
A.Any bank branch manager where the account is held
B.The Director, or any other officer not below the rank of Deputy Director authorized by the Director
C.The local Police Inspector of the area where the property is situated
D.Only the Chief Justice of the local High Court
Explanation: Section 5 of the PMLA authorizes the Director, or any other officer not below the rank of Deputy Director authorized by the Director, to provisionally attach property for a period not exceeding 180 days if they have reason to believe that any person is in possession of proceeds of crime.
9A customer repeatedly deposits cash sums of ₹45,000 into a bank account multiple times a day to avoid the PAN requirement or threshold triggers. What is this practice called in AML terminology?
A.Tipping-off
B.Smurfing or Structuring
C.Shell structuring
D.Integration layering
Explanation: Structuring (often executed by 'smurfs') involves breaking down a large sum of cash into smaller, below-threshold transactions to evade identification, reporting, or record-keeping requirements.
10What is the maximum duration for which provisional attachment of property can remain in force under Section 5(1) of the PMLA, 2002?
A.90 days
B.120 days
C.180 days
D.365 days
Explanation: Under Section 5(1) of the PMLA, the provisional attachment of property can be ordered for a period not exceeding 180 days from the date of the order, during which it must be confirmed by the Adjudicating Authority.

About the IIBF AML/KYC Exam

The IIBF Certificate Examination in AML and KYC equips banking and finance professionals with in-depth knowledge of anti-money laundering regulations and know-your-customer norms in India. It covers placement/layering/integration, PMLA 2002 rules, RBI Master Directions on KYC, risk profiling, PEP rules, STR/CTR reporting thresholds, and compliance framework.

Assessment

Single remote-proctored online MCQ paper in English. 120 questions for 100 marks; no negative marking. Subject: Anti-Money Laundering & KYC laws and banking norms in India.

Time Limit

2 hours

Passing Score

60 out of 100

Exam Fee

Members ₹1,100 / Non-members ₹1,600 per attempt (+ convenience charges & taxes) (Indian Institute of Banking & Finance (IIBF))

IIBF AML/KYC Exam Content Outline

30%

Unit 1 — Anti-Money Laundering (AML) Basics & Legislative Framework

Laundering stages (placement, layering, integration), PMLA 2002 provisions, offense of money laundering, attachment of property, and international bodies (FATF, Basel Committee).

30%

Unit 2 — Know Your Customer (KYC) Guidelines & Due Diligence

RBI Master Directions on KYC, Customer Acceptance Policy, Customer Identification Procedures (CIP), Customer Due Diligence (CDD), risk-based categorization, and Politically Exposed Persons (PEPs).

25%

Unit 3 — Transaction Monitoring & Reporting to FIU-IND

Transaction monitoring systems, Suspicious Transaction Reports (STR), Cash Transaction Reports (CTR), reporting thresholds, submission timelines, and FIU-IND functions.

15%

Unit 4 — Technology, Sanctions & Compliance Standards

AML screening software, watchlists (UNSC, OFAC), role of Principal Officer and Designated Director, record-keeping requirements under PMLA, and staff training.

How to Pass the IIBF AML/KYC Exam

What You Need to Know

  • Passing score: 60 out of 100
  • Assessment: Single remote-proctored online MCQ paper in English. 120 questions for 100 marks; no negative marking. Subject: Anti-Money Laundering & KYC laws and banking norms in India.
  • Time limit: 2 hours
  • Exam fee: Members ₹1,100 / Non-members ₹1,600 per attempt (+ convenience charges & taxes)

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

IIBF AML/KYC Study Tips from Top Performers

1Memorize the three stages of money laundering: placement (introducing cash), layering (distancing funds through complex transfers), and integration (reintroducing funds as legitimate assets).
2Learn the reporting timelines for FIU-IND: CTR and CCR must be submitted by the 15th day of the succeeding month; STR must be submitted within 7 days of concluding suspicion.
3Understand the risk categorization updation rules: High risk (every 2 years), Medium risk (every 8 years), Low risk (every 10 years).
4Know the record-keeping rules: Under PMLA, banks must preserve transaction records and customer identification data for at least 5 years after the transaction or closure of the account.
5Be clear on customer due diligence categories: Basic CDD, Simplified CDD (for low-risk accounts like small accounts), and Enhanced Due Diligence (EDD) for high-risk clients like PEPs.
6Keep up to date with the latest RBI Master Directions on KYC, as guidelines on PEPs and beneficial ownership are frequently updated.

Frequently Asked Questions

What is the IIBF Certificate Examination in AML and KYC?

It is an IIBF professional certification for banking staff and aspirants covering anti-money laundering (AML) laws and know-your-customer (KYC) compliance in India, based on PMLA 2002 and RBI Master Directions.

What is the exam pattern and pass mark?

The exam consists of 120 objective MCQs for a total of 100 marks, to be completed in 2 hours. The minimum passing mark is 60 out of 100. There is no negative marking.

How much does the IIBF AML/KYC exam cost?

The registration fee is ₹1,100 for IIBF members and ₹1,600 for non-members per attempt, plus applicable convenience charges and taxes.

Who is eligible to apply for this certificate?

Any candidate who has passed the 12th standard (or equivalent) or who has completed the IIBF BC/BF examination is eligible. It is open to both members and non-members.

Are there any training or attendance requirements?

No. Unlike some other certifications, there is no mandatory classroom training, course attendance, or project work required. Candidates can prepare via self-study and take the online remote-proctored exam.

Are these official IIBF exam questions?

No. These are original, high-quality practice questions aligned to the official IIBF AML/KYC syllabus, designed to help candidates prepare.