Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of ₹30 lakh on MUFG Bank Ltd. by order dated December 23, 2021. The penalty was levied for non-compliance with RBI’s directions on “Loans and Advances – Statutory and Other Restrictions,” after inspection findings showed the bank had sanctioned loans and advances to companies whose boards included persons who were directors on boards of other banks, without obtaining approval at the Management Committee level. RBI stated that the penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, and clarified that the action was based on regulatory compliance deficiencies and not intended to pronounce on the validity of any transaction or agreement.