The story so far: Bank of Baroda, the second largest Public Sector Bank on Thursday (July 2, 20260 informed stock exchanges that it had paid $600 million (about ₹5,700 crore) to settle litigation initiated by the administrators of NMC Health Plc, NMC Healthcare Ltd and NMC Holding Ltd. This ends one of the largest cross-border banking disputes involving an Indian lender. The settlement also brings to an end years of litigation in the Abu Dhabi Global Market (ADGM) courts and the High Court of England and Wales arising from the collapse of UAE-based B.R. Shetty led healthcare giant in 2020. The out of court settlement has been reached without any admission of liability or wrongdoing by Bank of Baroda.
What was the dispute?
In 2020 Abu Dhabi’s largest healthcare provider NMC Healthcare founded by India-born entrepreneur B.R. Shetty collapsed after undisclosed debt running into billions of dollars was reportedly uncovered and soon after it entered administration. Its administrators had mounted civil recovery proceedings against several parties they believed had contributed to the company’s collapse including that of Bank of Baroda.
The litigation against Bank of Baroda spanned multiple jurisdictions, including proceedings before the Abu Dhabi Global Market (ADGM) Court of First Instance and insolvency-related proceedings in the High Court of England and Wales in U.K.
The administrators had appealed to recover money for NMC’s creditors by pressing that certain banking transactions should never have been permitted because they helped sustain a reportedly fraudulent financial structure. The litigation was part of an effort to recover losses from former executives, advisers, auditors and financial institutions connected with NMC.
What was NMC Health?
Founded by India-born entrepreneur B.R. Shetty in 1975 NMC Health grew into the UAE’s largest private healthcare provider, operating hospitals, clinics and pharmacies across the West Asia region. The company was listed on the London Stock Exchange and was once part of the FTSE-100 index.
Its expansion was reportedly financed largely through bank borrowings from lenders across West Asia, Europe and India. By 2019, NMC had emerged as one of West Asia’s biggest corporate success stories.
That changed in late 2019, when short seller Muddy Waters questioned the company’s financial statements and debt disclosures. Subsequent investigations reportedly revealed more than $4 billion of previously undisclosed debt, triggering one of the biggest corporate collapses in West Asia. NMC entered administration in 2020 and Alvarez & Marsal was appointed to recover assets for creditors.
How did Bank of Baroda become involved in this case?
Bank of Baroda reportedly was not merely a lender to NMC. As per the claims of administrators, the bank’s Abu Dhabi branch was allegedly involved in processing financing arrangements and transactions that enabled the healthcare giant and related entities to conceal their true financial position.
The administrators alleged that several banks, including Bank of Baroda, reportedly facilitated transactions without carrying out adequate anti-money laundering (AML), know-your-customer (KYC) and due diligence checks.
These alleged failures, they argued, contributed to the continuation of the alleged fraud and increased losses suffered by creditors. Bank of Baroda has repeatedly denied any wrongdoing.
Why the settlement?
Rather than continue with lengthy and expensive litigation, Bank of Baroda is believed to have opted to pay $600 million through its Abu Dhabi branch. As per exchange filing it has been reached under a confidential settlement agreement.
The bank on Thursday (July 2, 2026) informed stock exchanges that the agreement resolves all claims between the parties and that its financial exposure is limited to the agreed settlement amount. It also emphasised that the settlement does not constitute an admission of liability or wrongdoing. The remaining commercial terms have not been disclosed.
For Bank of Baroda, the settlement brings to an end one of the largest legacy legal risks clouding its overseas operations. Years of cross-border litigation had created uncertainty over the bank’s potential financial exposure. Following the news of the settlement and that bank’s Abu Dhabi branch had already made the payment, the bank’s stock plunged over 4% on the BSE.
Does the settlement end all NMC litigation?
It does not. The settlement only resolves the claims between Bank of Baroda and the joint administrators of NMC Health, NMC Healthcare and NMC Holding.
Other proceedings arising from NMC’s collapse continue against former promoters, executives and other parties accused of participating in or facilitating the alleged fraud. Recovery actions by the administrators have already resulted in several settlements with different defendants, while other cases remain pending in various jurisdictions.
What does it mean for Bank of Baroda?
Although the figure of $600 million is substantial, the financial impact will depend on the provisions already created by the bank and how the payment is accounted for in its financial statements.
However, the settlement removes a significant legal overhang on the bank. For investors, this provides greater clarity on the bank’s future liabilities and eliminates uncertainty surrounding one of the most complex overseas disputes faced by an Indian public sector lender.
Conclusion
The NMC collapse has become a significant case in international banking, highlighting the vulnerability of lenders to legal risks beyond ordinary credit losses.
Published – July 03, 2026 08:20 am IST
