Customer due diligence (CDD) is required at the start of a business relationship or when an account is opened. It must also be performed for occasional transactions exceeding the set threshold, when there is suspicion of money laundering or terrorist financing, and when the accuracy of earlier customer identification data is questionable. Continued CDD applies during the relationship as well, especially if the customer's risk profile or transaction behavior shifts. Below, I have shared when must customer due diligence cdd be conducted.
What are the Situations that Require CDD?
Account Opening: Verify identity and address using officially valid documents before establishing any account-based relationship.
Occasional Transactions: Run checks on one-off transactions above the prescribed threshold, including linked transactions that together cross the limit.
Wire Transfers: Confirm originator and beneficiary details for transfers exceeding the specified amount.
Suspicion Arises: Apply checks whenever money laundering or terrorist financing is suspected, irrespective of exemptions or thresholds.
Doubts about Data: Repeat verification when earlier identification data appears false, outdated, or inadequate.
Risk Profile Changes: Refresh checks when the customer's activity, ownership, or risk category shifts noticeably.
New Products or Services: Reassess the customer when they apply for a higher-risk facility, such as a large credit line or foreign remittance service.
Periodic Review: Update records at regular intervals, more frequently for high-risk customers than for low-risk ones.
What Information do Institutions Collect during CDD?
Institutions collect the customer's full name, photograph, permanent address, PAN, and other officially valid identity proofs. For companies, trusts, and partnerships, they also identify beneficial owners, directors, and authorized signatories. The customer's occupation, income source, and intended account activity are recorded to build a risk profile. Higher-risk customers may face additional questions about their funds and business relationships, and all collected records are retained for the period prescribed by law.
Get Land Records and Property Papers Checked by Legal Experts at NoBrokerYour Feedback Matters! How was this Answer?
Shifting, House?
✔
Lowest Price Quote✔
Safe Relocation✔
Professional Labour✔
Timely Pickup & Delivery
Intercity Shifting-Upto 25% Off
Check Prices
Intracity Shifting-Upto 25% Off
Check Prices
City Tempo-Upto 50% Off
Book Now
When must Customer Due Diligence CDD be Conducted?
ravi12
15 Views
1
3 days
2026-09-24T07:17:00+00:00 2026-09-24T07:17:01+00:00Comment
Share