US regulators have slapped a $31.6m payment on Union Bank of California, a subsidiary of Mitsubishi UFJ Financial Group, for its failure to establish and maintain an adequate anti-money laundering programme and to monitor activity related to the proceeds of drug sales.

The US bank faces a $10m civil penalty and a $21.6m payment to the Department of Justice for its failure to monitor adequately Mexican casa de cambio accounts and report suspicious activity in a timely manner, the US Treasury's Financial Crimes Enforcement Network(FinCEN) said in a statement.