In which situation may a bank be required to file a SAR?

A bank is required to file a Suspicious Activity Report (SAR) when there is a suspicion of money laundering or other criminal activities. This is in line with the Bank Secrecy Act (BSA) and the USA PATRIOT Act requirements, which mandate financial institutions to report any suspicious transactions that might indicate illegal activity. The purpose of filing a SAR is to assist law enforcement agencies in their efforts to combat crime, including fraud, terrorism financing, and money laundering. When bank personnel observe unusual patterns of behavior, such as transactions that do not align with a customer’s typical banking habits, this raises red flags that warrant a SAR filing.

In contrast, a customer simply requesting a loan does not inherently suggest any criminal activity. Likewise, routine account audits are standard procedures meant to ensure compliance and reliability in banking operations; they do not require SAR filings unless suspicious activity is uncovered during the audit. Similarly, the detection of a high balance in an account does not automatically imply a need for a SAR unless it is associated with unusual or suspicious behavior. Thus, the key criterion for a SAR is the suspicion of illicit activities, making that option the only appropriate choice in this scenario.