Due Diligence is one of the most important step in knowing the details of the client (entity or a person) you are about to have a business relationship. Based on the Risk factors in the initial KYC and screening, Due Diligence are of 3+1 type.
You may find, everywhere its mentioned as 3 types and that is correct and you can say that. But adding one more as brief info will be better.
Simplified Due Diligence (SDD)
When a person or entity with lower risk like a government employee or a bank executive or a teacher or a farmer or a petty labor or REGA employees apply to get a relationship established, they posses least threats to the Financial systems and poses least risk of Money Laundering. However, this may change in future thus the institutions needs to stay alert on it and recognize the monitoring and alerts as BAU
Standard Due Diligence (CDD)
This is the most general form of due diligence which is performed with most of the customers and its for the medium risk customers. E.g. All small businesses (not cash intensive), private employees or citizens which do not hold any prominent social responsible designations.
Enhanced Due Diligence (EDD)
When a person screened as special entity or special category customers with high risk of AMLs then these people are subject to enhanced due diligences. Like PEPs, Forex Exchangers, Club Owners and Real Estate Brokers and Luxe Sellers, Financial and Legal consultants.
Ongoing Due Diligences (ODD)
