Money & Banking

RBI imposes ₹30 lakh penalty on MUFG Bank

Our Bureau | | Updated on: Dec 24, 2021

Move follows non-compliance with RBI directions on loans and advances

The Reserve Bank of India has imposed a monetary penalty of ₹30 Lakh on MUFG Bank Ltd for non-compliance with its directions on ‘Loans and Advances – Statutory and Other Restrictions’.

MUFG Bank has the largest network amongst Japanese banks in India, with a presence in five locations.

RBI, in a statement, said its inspection of the bank (with reference to its financial position as on March 31, 2019) revealed, inter alia, non-compliance with the aforesaid direction to the extent that it had sanctioned loans and advances to companies whose board of directors included person(s) who were director(s) on boards of other banks, without such sanctions being accorded at the level of its management committee.

In furtherance to the same, a notice was issued to the bank advising it to showcause as to why penalty should not be imposed on it for non-compliance with the RBI direction.

“After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by the bank, the RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI direction was substantiated and warranted imposition of monetary penalty,” the central bank said.

RBI emphasised that its action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

MUFG Bank caters to the banking needs of Japanese and global corporates that are establishing or growing their businesses in India.

Published on December 24, 2021
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