The club said on Saturday said the AFL was investigating "another incident of abuse” involving Bachar Houli, who is Muslim.
The banner, adorned with "UPF” logos and which read "Stop the mosques”, was displayed near the scoreboard at the city end of the MCG at half-time.
A video of it being put in place was later uploaded to the United Patriots Front Facebook page.
The AFL chief, Gillon McLachlan, condemned the banner as "divisive, ignorant and deeply offensive”.
McLachlan said the league’s security manager was investigating and if the people responsible were AFL members they would "be banned from games”.
"Our game has a history of egalitarianism and inclusion, and we must make sure that it continues to be a place where all Australians feel welcome,” McLachlan said.
The Richmond Football Club said in a statement: "Bachar Houli, and the broader Muslim community, deserve better than having to endure the small-minded people that seek to promote division and hatred.”
Collingwood also called for a ban on those responsible for the banner. "The club awaits the outcome of further investigations into the matter by the AFL, the Victoria Police and MCG security,” a club statement read.
The banner, which also said "Go Pies”, drew swift condemnation from the Collingwood president, Eddie McGuire, who promised bans if the culprits were found to have any official connection with the club.
"These people do not speak for Collingwood and are condemned by Collingwood. If it is established that they have a formal connection to the club, this connection will be severed,” the club statement said. "There is no place at Collingwood, or in our game, for such behaviour.”
Veteran sport broadcaster Francis Leach also condemned the banner. "The UPF saw an opportunity to exploit a nasty stream of fear and loathing that has crept into the game and the wider community,” Leach wrote in a blog post on Saturday.
"How the game responds to this latest act of intolerance will say a lot about where it sees itself as a community leader. One thing that it must do is stand up for the values of tolerance and inclusion that underpin everything we cherish about sport and particularly AFL football.”
The Australian foreign minister, Julie Bishop, has also denounced the display.
It is "deeply unfortunate” people chose a football game to make a political statement, she said.
Source: The Guardian