SBI JIBO Exam Preparation Series | Part 1

SBI JIBO Exam Preparation 2026: Banking Operations, KYC, AML/CFT & PMLA – Part 1

Welcome to Part 1 of the SBI JIBO Exam Preparation Series. This series is designed as a structured, topic-by-topic preparation resource for officers preparing for the Junior India Based Officer selection process. The focus is not on generic banking theory alone. Each chapter is intended to connect concepts with banking operations, regulatory logic, risk identification, practical application and exam-oriented recall.

Part 1 covers Banking Operations with special emphasis on Know Your Customer (KYC), Customer Due Diligence (CDD), Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), the Prevention of Money Laundering Act, 2002, transaction monitoring, regulatory reporting, Central KYC Records Registry (CKYCR), beneficial ownership, customer-risk classification and important operational controls.

1. SBI JIBO 2026: What the Official Notification Confirms

The 2026 notification for selection as Junior India Based Officer invited eligible and willing SBI officers for foreign postings at the Bank’s foreign offices and its foreign subsidiaries or affiliates.

Eligibility at a glance

The specified experience areas were Credit Management, International Banking, Treasury Operations, Branch Operations, Risk Management and Investment Management. Experience in more than one of these areas could receive preference. Professional or technical qualifications and knowledge of foreign languages other than English could also receive preference.

The 2026 notification also required the officer to have completed applicable mandatory posting or assignment stipulations under the appointment and promotion framework. This is an important reminder that JIBO preparation is not only about the written test; eligibility and service-record compliance are part of the selection framework.

Service record conditions

• The best three years out of the last four years of CDS grades were considered.
• None of the three selected years could have a CDS grade below AA.
• Pending or contemplated disciplinary proceedings or investigation could make an officer ineligible.
• Specified penalties whose rigor period had not ended and inclusion in the List of Officers of Doubtful Integrity were disqualifying conditions.
• Vigilance / disciplinary clearance was also relevant before relieving for a foreign posting.

Placement and prior-selection restrictions

The 2026 notification contained additional restrictions relating to placement norms, certain out-of-turn inter-circle transfers, centre-stay conditions, previous foreign-posting interviews, earlier declined foreign postings and earlier overseas JIBO / Dealer assignments. A candidate should therefore read the latest selection communication in full rather than relying on an old eligibility checklist.

2. JIBO 2026 Examination Pattern

The official 2026 notification confirms that the online objective test was used for shortlisting candidates for interview. It consisted of four sections:

Duration: 120 minutes. Negative marking: applicable for incorrect answers.

The 2026 notification does not state the detailed question and mark distribution in the public document. Therefore, older numerical patterns should not be copied into a 2026 guide unless they are confirmed by the applicable examination communication.

3. Why Banking Operations Is a High-Value JIBO Area

Banking Operations brings together customer onboarding, transaction processing, regulatory compliance, risk controls, fraud prevention, reporting, record management and technology-supported monitoring. For JIBO preparation, it is especially important because the officer must understand how banking rules operate across domestic and international environments.

A strong candidate should be able to answer five questions for any operational rule:

1. What is the rule?
2. Why does the rule exist?
3. What triggers the rule?
4. What action must the bank take?
5. What record or report follows?

This approach converts memorisation into operational understanding and is particularly useful for scenario-based and close-option questions.

4. KYC, AML and CFT: Core Objective

The purpose of KYC, AML and CFT controls is to prevent banks and other regulated entities from being used intentionally or unintentionally for money laundering, terrorist financing or other prohibited financial activity. The regulatory framework also supports financial-system integrity, customer identification, risk management and effective transaction monitoring.

For exam preparation, remember the operational chain:

Identify the customer → understand the customer → assess risk → monitor activity → report when required → maintain evidence.

5. Prevention of Money Laundering Act, 2002: Core Concepts

The Prevention of Money Laundering Act, 2002 provides the statutory framework for addressing money laundering and related obligations.

Sections worth remembering

• Section 2: Definitions.
• Section 3: Offence of money laundering.
• Section 4: Punishment for money laundering.
• Section 12: Obligations relating to records and information, subject to the Act and applicable rules.

Memory line: 2 = Definitions, 3 = Offence, 4 = Punishment, 12 = Records / Information obligations.

The classic understanding of money laundering is that illicit proceeds are moved or transformed so that their criminal origin is concealed and the funds appear legitimate.

6. Three Stages of Money Laundering

1. Placement: introduction or disposal of criminal proceeds into the financial system.
2. Layering: creation of transactions or structures designed to separate the proceeds from their original source.
3. Integration: re-entry of the proceeds into the legitimate economy in a manner that gives them an apparently lawful origin.

Exam memory: Placement → Layering → Integration.

7. FATF and International AML Standards

The Financial Action Task Force is the international standard-setting body for measures addressing money laundering, terrorist financing and proliferation financing. Its recommendations influence national AML/CFT frameworks and the risk assessment of jurisdictions and financial relationships.

For JIBO preparation, learn the role of FATF rather than relying only on memorised country lists. Country classifications can change over time and should be checked from current official FATF publications immediately before an examination.

8. Regulated Entities

The KYC framework applies to regulated entities covered by the relevant RBI and PMLA framework. Broadly relevant banking and financial entities include banks, specified co-operative banks, All India Financial Institutions, NBFCs, payment-system entities and other covered reporting entities.

The exam point is not simply the list. It is the principle that regulated financial entities have defined responsibilities for customer identification, due diligence, monitoring, record management and reporting.

9. Customer Acceptance Policy

Customer Acceptance Policy is the first control gate. A bank should not establish a relationship without understanding who the customer is, what the customer does and what risks are associated with the proposed relationship.

Important preparation points include:

• Do not permit anonymous or fictitious-name relationships.
• Assess the nature of the activity, geography, business profile and expected payment behaviour.
• Apply risk-based customer categorisation.
• Apply sanctions and adverse-information screening as required.
• Do not treat customer onboarding as a one-time compliance event.

10. Customer Identification Procedure

Customer Identification Procedure establishes and verifies the identity of the customer using the documents and processes prescribed under the applicable regulatory framework.

Common examination areas include:

• Officially Valid Documents and permitted equivalent documents.
• Digital KYC and e-KYC processes.
• Video-based Customer Identification Process (V-CIP).
• Central KYC mechanisms.
• Identification of beneficial owners.
• Additional verification where the profile, ownership or transaction behaviour creates elevated risk.

11. Customer Due Diligence: What the Officer Must Understand

Customer Due Diligence means building a reliable understanding of the customer, the beneficial owner, the source or nature of activity and the risks associated with the relationship.

Core CDD steps

1. Identify and verify the customer.
2. Identify the beneficial owner where required.
3. Understand the nature and purpose of the relationship.
4. Assess and classify risk.
5. Monitor transactions and activity on an ongoing basis.

Three broad levels of due diligence

12. Enhanced Due Diligence

Enhanced due diligence is not merely collecting more documents. It is a deeper assessment of whether the customer’s ownership, business, financial profile and transaction behaviour are credible and economically rational.

Possible enhanced measures can include:

• Financial statements and business licences.
• Understanding ownership and organisational structure.
• Studying major customers and suppliers.
• Understanding manufacturing or trading activity.
• Independent enquiries and field verification.
• Open-source adverse-information or media checks.
• Closer monitoring of transactions and expected activity.

13. Ongoing Due Diligence and Transaction Monitoring

KYC does not end after an account is opened. The institution must monitor whether transactions remain consistent with the customer’s known profile, business, source of funds and expected activity.

High-risk indicators can include unusual transaction volumes, complicated structures without an apparent business rationale, activity inconsistent with the customer’s profile, unexpected geographies and rapid movement of funds.

Key principle: A transaction does not become suspicious merely because it is large, and a small transaction is not automatically safe. Suspicion depends on context, pattern and reasonable grounds.

14. CTR and STR: Do Not Confuse Them

The supplied study material uses the familiar ₹10 lakh cash threshold and the ₹5 lakh cross-border wire threshold as exam-oriented figures. These should be treated as study references only and cross-checked against the current applicable PML Rules, FIU-India reporting specifications and internal instructions before the examination because regulatory thresholds and reporting mechanics can be amended.

15. Reporting Concepts for Exam Revision

The study notes emphasise the following reporting categories:

• Cash Transaction Report (CTR)
• Suspicious Transaction Report (STR)
• Counterfeit Currency Report (CCR)
• Non-Profit Organisation Transaction Report (NTR)
• Cross-Border Wire Transfer Report (CBWTR)

The important skill is to distinguish threshold reporting, suspicion reporting and special-category reporting.

16. Cash Transaction Monitoring

Cash transaction monitoring is designed to detect significant cash activity and connected patterns that may indicate structuring or other risk. Integrally connected cash transactions are especially important because breaking a transaction into smaller amounts does not automatically remove it from the monitoring framework.

Exam focus: Learn the difference between an individual threshold and a series of connected transactions aggregated for reporting purposes.

17. Suspicious Transaction Reporting

A suspicious transaction may be identified through:

• Transactions that appear to involve proceeds of crime.
• Unusual or unjustified complexity.
• Transactions with no apparent economic rationale or bona fide purpose.
• Attempts that are abandoned or not pursued after scrutiny is likely to arise.
• Patterns inconsistent with the customer’s known profile.

The supplied preparation notes use a seven-day reporting point after the transaction is concluded to be suspicious. The exact reporting workflow and current statutory language should be checked against the latest applicable FIU-India framework and bank procedure.

18. Counterfeit Currency: Operational Discipline

Counterfeit currency is both an operational and compliance issue. The notes should be handled according to the prescribed impounding, reporting, documentation and preservation procedure. They should not be casually returned to circulation or destroyed contrary to the applicable procedure.

For exam preparation, remember the operational sequence:

Detect → impound → acknowledge as prescribed → report → preserve → maintain records.

19. Cross-Border Wire Transfers

Cross-border transfers are particularly relevant to JIBO because foreign-office operations require an understanding of international payment flows, customer information, transaction purpose and financial-crime controls.

In addition to threshold concepts, the candidate should understand why complete originator / beneficiary information, sanctions screening, transaction purpose and risk-based monitoring matter in cross-border activity.

20. Trade-Based Money Laundering

Trade-based money laundering uses trade transactions to disguise illicit value.

Common red-flag techniques include:

• Over-invoicing
• Under-invoicing
• Multiple invoicing
• False or inconsistent pricing
• Misdescription or concealment of goods

In practice, the officer should look for inconsistencies between the commercial contract, invoice, shipment, goods, counterparties and movement of funds.

21. Record Management: A Must-Remember Area

Record management enables a transaction to be reconstructed and permits competent authorities to obtain necessary information when required.

Under the RBI KYC framework, regulated entities are required to retain relevant transaction records for at least five years from the date of transaction and identification records for at least five years after the business relationship ends, subject to the precise requirements of the applicable law and rules.

Transaction records should be sufficient to reconstruct the transaction, including relevant information such as the nature of the transaction, amount, currency, date and parties involved.

22. Central KYC Records Registry (CKYCR)

CKYCR is a central repository for KYC records. The KYC framework provides for regulated entities to capture and share prescribed KYC information through the central registry according to applicable rules and procedures.

Important points for JIBO revision:

• CKYCR is intended to reduce unnecessary duplication of KYC work while preserving regulatory controls.
• CERSAI is authorised to operate the Central KYC Records Registry.
• Reporting entities upload prescribed KYC records within the applicable timeline.
• A KYC Identifier is generated for customers.
• Additional information collected by a regulated entity is handled according to the prescribed update and sharing framework.

The supplied study material identifies the KYC Identifier as a 14-digit number. Memorise this only after cross-checking the latest applicable procedural communication.

23. 2025–26 KYC Update Relevant for 2026 Preparation

The RBI’s KYC framework was updated through amendments in 2025. One notable 2025 change stated that for a low-risk individual customer, the regulated entity should allow transactions and ensure KYC updation within one year of the KYC becoming due or up to 30 June 2026, whichever is later, with regular monitoring continuing. The amendment also permitted specified KYC-updation declarations through an authorised Business Correspondent in the stated circumstances.

This is an excellent example of why 2026 preparation should use the latest regulatory position rather than relying only on older classroom notes.

24. Video-Based Customer Identification Process (V-CIP)

V-CIP is a technology-enabled customer identification process based on a secure, live and consent-based audio-visual interaction conducted by an authorised official, subject to the prescribed technical, security and compliance requirements.

For exam purposes, remember that V-CIP is not merely a video call. It is a controlled customer-identification and due-diligence process with defined verification and audit requirements.

25. Unique Customer Identification

A unique customer identifier allows a bank to consolidate relationships and avoid treating the same customer as multiple unrelated identities. It supports de-duplication, linkage of accounts and more effective transaction monitoring.

The supplied study material notes that the bank uses the CIF number as its customer identification code. Institution-specific systems can change, so internal communications should always take precedence for operational questions.

26. Walk-In Customer

A walk-in customer does not maintain an account-based relationship with the regulated entity but undertakes a transaction with it. The absence of an existing account relationship does not remove applicable compliance requirements.

This distinction is frequently useful in scenario-based questions because customer identification and transaction-based compliance can still be required even where there is no ordinary deposit account relationship.

27. Officially Valid Documents and Identity Verification

The current regulatory framework should always be consulted for the precise list and permitted combinations of documents. For study purposes, commonly encountered identity documents include passport, driving licence, voter identity card and other documents recognised under the applicable KYC framework.

PAN is an important separate concept. Depending on the relevant requirement, PAN may be collected for tax or identity purposes, while an additional document may be needed for address verification. Where PAN is not available, the applicable declaration such as Form 60 may be required under the relevant framework.

28. Simplified Measures and Deemed Address Documents

Simplified measures may be permitted for specified low-risk situations within the applicable framework. Candidates should understand the principle rather than memorise an outdated list: simplified KYC is controlled relief, not exemption from identification.

Where an OVD does not show the current address, the KYC framework permits specified alternative documents for limited address-verification purposes, subject to prescribed conditions and subsequent submission requirements.

29. Beneficial Ownership

Beneficial ownership is one of the most important concepts in KYC because the legal name of an entity may not reveal the natural person who ultimately owns or controls it.

The officer should think in terms of:

• Who ultimately owns the entity?
• Who ultimately controls the entity?
• Is there indirect ownership through another legal person?
• If ownership does not establish the answer, who exercises control through other means?

Beneficial-owner thresholds differ by the constitution of the legal entity and can be amended by regulation. Therefore, use the current RBI / PML Rules position for numerical thresholds rather than relying blindly on historical study-note figures.

30. Non-Face-to-Face Customers and Risk Controls

Non-face-to-face relationships can require additional controls because the bank has fewer opportunities for physical verification.

Depending on the applicable framework and risk, additional measures can include:

• Independent verification of identity documents.
• Additional customer information.
• Enhanced due diligence.
• Sanctions and adverse-information screening.
• Closer transaction monitoring.
• Source-of-funds or source-of-wealth checks where required.

31. Entity-Wise KYC: What to Prepare

Do not memorise documentation as a shopping list. The examiner may instead test why a particular document is required, whose identity must be established or who the beneficial owner is.

32. Roles and Responsibilities in AML / KYC Governance

Designated Director

The Designated Director is responsible for overall compliance obligations assigned under the AML / KYC framework, including ensuring that an appropriate policy and governance structure exists.

Principal Officer

The Principal Officer plays a central role in AML / CFT implementation, including coordination, risk assessment, transaction monitoring and regulatory reporting arrangements.

Operational functionaries

Branches, transaction-processing units, AML monitoring teams, compliance teams and audit functions each contribute to the control environment. Effective AML / KYC is therefore a business-wide responsibility, not a single-department activity.

33. Customer Risk Classification

Customers are assessed through a risk-based approach. The study material uses the familiar categories:

• Low Risk
• Medium Risk
• High Risk

Risk classification should respond to the customer’s profile and behaviour. A relationship can require reassessment when there is a material change in ownership, geography, transaction pattern, business activity or other risk factors.

34. AML / KYC Technology and Monitoring

The supplied study material identifies AMLOCK as a monitoring system used in the bank’s AML framework and describes alert generation against certain transaction categories. These institution-specific details are useful for internal examination preparation, but system configurations and thresholds can change.

For 2026 preparation, the more durable concept is this: monitoring systems should generate alerts when activity is inconsistent with the customer’s risk classification and expected profile, and those alerts must feed an appropriate investigation and reporting process.

35. Operational Risks of Non-Compliance

Weak KYC / AML controls can expose a bank to multiple risks:

• Operational Risk
• Reputation Risk
• Compliance Risk
• Legal Risk

For JIBO preparation, understand the cause-and-effect relationship: weak customer identification can produce poor risk classification; poor risk classification can weaken monitoring; weak monitoring can increase the risk of financial crime exposure, regulatory action and reputational damage.

36. High-Value Exam Traps

1. KYC is not a one-time event. Customer information and risk must be kept updated under the applicable framework.
2. Large does not automatically mean suspicious. Context matters.
3. Small does not automatically mean safe. Suspicion is not eliminated by a low amount.
4. Threshold reporting and suspicious reporting are different.
5. Beneficial owner means the ultimate natural person behind ownership or control.
6. Internal operating instructions are not the same as statutory provisions. Know which layer a question is testing.
7. Old numerical figures can become outdated. Verify the latest regulatory circular or internal communication.

37. Rapid Revision Table

38. How to Study Part 1 Efficiently

Use a five-step study method:

1. Build the framework first: Understand PMLA, KYC, AML, CFT, CDD and risk-based monitoring.
2. Create a reporting sheet: Separate CTR, STR, CCR, NTR and CBWTR and write the trigger for each.
3. Make a document matrix: Compare individuals, proprietorships, firms, companies, trusts and other entities.
4. Revise regulatory changes: Maintain a separate page for amendments issued after your base study material was prepared.
5. Practise scenarios: Ask what you would do when a customer’s activity suddenly becomes inconsistent with the known profile.

39. Self-Test: 20 Questions for Practice

1. What is the primary objective of KYC and AML controls?
2. Which section of PMLA defines the offence of money laundering?
3. What are the three stages of money laundering?
4. How is a threshold-based report different from a suspicious transaction report?
5. Can a transaction be suspicious even when the amount is small?
6. What is meant by customer due diligence?
7. What is enhanced due diligence?
8. What is the role of CKYCR?
9. What is the difference between an account-based customer and a walk-in customer?
10. What is V-CIP?
11. Why is beneficial ownership important?
12. What is the purpose of a unique customer identifier?
13. Why are connected cash transactions important?
14. What are the common techniques of trade-based money laundering?
15. What is the role of a Principal Officer?
16. Why must high-risk customers be monitored more closely?
17. What are the major risks arising from weak AML compliance?
18. Why should old numerical thresholds be verified before the exam?
19. What are the four sections confirmed for the 2026 JIBO online test?
20. What is the duration of the 2026 JIBO online test?

40. Final Takeaway

For JIBO, Banking Operations should be studied as a system rather than as disconnected facts. The strongest preparation combines regulatory knowledge, operational sequencing, risk awareness and fast recall.

You should be able to move from a customer profile to KYC requirements, from KYC to risk classification, from risk classification to transaction monitoring, and from an identified red flag to the correct escalation or reporting path.

This article is Part 1 of the SBI JIBO Exam Preparation Series. The series will progressively cover the major areas candidates need for the selection process, with each article designed as an independent revision chapter and as part of a larger structured preparation system.

Sources Used for the 2026 Update

• State Bank of India – Official Website
• Reserve Bank of India – Official Website
• Financial Intelligence Unit – India
• Financial Action Task Force