Question

Inoperative accounts are classified under which risk category

Answer 1

Answer:

The classification is there only to bring to the attention of dealing staff, the increased risk in the account. The transaction may be monitored at a higher level both from the point of view of preventing fraud and making a Suspicious Transactions Report.

Answer 2

Inoperative accounts are classified under medium risk category

Explanation:

• Inoperative accounts are accounts that are non functional for about two years are considered as inoperative or dormant cases.  Since these accounts do have any transactions over a period of time the customers are sent letters  and they are undelivered then there is an enquiry started for these customers.
• The risk category becomes important  with these accounts since they have not been operational for a period of time. It is the responsibility of the bank to connect with these people through the people who had introduced the account holder
• The option of customer risk is associated with the risk of illegal possession of money and the inoperative account from the view point of the banks. The category of risk is put under conditions of certain systematic approach and condition of the risk that the customer can pose for the bank

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