RBI imposes monetary penalty of Rs.45 Lakh on this Bank; Check Name of the Bank

The Reserve Bank of India (RBI) has imposed, by an order dated May 25, 2022, a monetary penalty of ₹45 Lakh (Rupees Forty-five lakh only) on MUFG Bank Ltd. (the bank), for non-compliance with the directions issued by RBI on “Time-bound implementation and strengthening of SWIFT-related operational controls” dated February 20, 2018. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with sections 46 (4) (i) of the Banking Regulation Act, 1949 (the Act).

This action is based on regulatory compliance issues and is not meant to be a judgement on the legitimacy of any transaction or agreement between the bank and its customers.

Background

An examination of the bank’s compliance position revealed, among other things, noncompliance with the aforementioned directions to the extent that the bank failed to implement Straight Through Processing (STP) between the Core Banking System (CBS)/accounting system and the SWIFT messaging system for transactions resulting in nonfunded exposure / exposure with financial implications within the time limit of April 30, 2018 prescribed under the said directions, and to comply with the affixed conditions. A notice was sent to the bank in this regard, directing it to show cause why a penalty should not be levied for violation with the RBI directive as indicated therein.

After considering the bank’s response to the notice as well as oral submissions made during the personal hearing, RBI determined that the charge of noncompliance with the aforementioned RBI direction was substantiated, warranting imposition of monetary penalties to the extent of noncompliance with such directions.

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