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JAIIB PPB Unit 2 — AML-KYC Guidelines: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 20 September 2026 · Paper 2 of the November 2026 cycle (22 November 2026)

This page is a free slice of our JAIIB PPB question bank for Unit 2 — AML-KYC Guidelines (Module A — General Banking Operations). The Mock Centre holds 102 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five of those questions to try, and the traps that cost marks.

PPB · Module A102 MCQs in the Mock Centre5 free belowPaper on 22 November 2026

Key facts examiners test from this unit

  1. ML stages: Placement → Layering → Integration (PLI); FT stages: Raising → Moving → Storing → Using; ML cleans dirty money, FT may dirty clean money.
  2. PMLA 2002 + PMLR rules; four pillars: FIU-IND (intelligence), ED (investigate/prosecute/attach), Special Courts (adjudicate), Regulators (guidelines).
  3. Sections: 3 (offence), 4 (punishment: RI 3–7 yrs, NDPS up to 10), 45 (cognizable + non-bailable), 2(ha) client, 2(fa) beneficial owner; DD anchors: 11A/12/12A/12AA.

5 free practice questions — tap an option

Five basic questions from this unit. Answers lock on the first tap, exactly as in the exam, and a short explanation opens underneath. The Mock Centre adds the moderate and tough questions, why every other option is wrong, the concept capsule and the exam tip — with your score and revision dates tracked.

Question 1 of 5
The FATF Standards, 2012 relate to:
Why (b): The FATF (Financial Action Task Force) Recommendations 2012 are the global AML/CFT standards which member countries — including India — implement.
Question 2 of 5
The 4 key elements of a KYC Policy are:
Why (a): The four pillars: CAP (whom to accept), CIP (how to identify), RISK MANAGEMENT (categorise), and MONITORING of transactions.
Question 3 of 5
FATCA relates to the tax reporting of which country?
Why (b): FATCA = the US Foreign Account Tax Compliance Act — reporting of US persons' accounts.
Question 4 of 5
The Director, FIU-IND can take action against:
Why (b): Accountability is personal too — the entity AND its officers (employees, managers, directors) are all within reach.
Question 5 of 5
PMLA's enforcement trio: investigations, financial intelligence and adjudication belong respectively to:
Why (a): The architecture: ED investigates/attaches, FIU-IND receives and disseminates reports (CTR/STR family), Special Courts try the offence (3-7 years' imprisonment; 10 for NDPS-linked).
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Placement/Layering/ IntegrationRaising/Moving/Storing/ UsingML's 3 stages vs FT's 4 stages
Sec. 2(fa)Sec. 2(ha)Beneficial OWNER vs CLIENT/customer
Practise all 102 questions on Unit 2. The free demo opens a slice of every subject with the same explanations; the PPB Online-only pass unlocks all 3,280 PPB questions, the full and module mocks, Smart Revision and the Readiness Score for one year (₹1,299). Not sure where you stand? Take the free 10-question test first.
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← Unit 1: Banker-Customer Relationship · Unit 3: Operational Aspects of KYC → · All PPB units · JAIIB 2026 guide

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Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. Regulatory figures verified as of September 2026; verify from official sources before relying on them in practice.