Bank of Baroda’s NMC Troubles Return With A $15 Bn Lawsuit

Bank of Baroda is facing a fresh legal challenge over the collapse of NMC Healthcare, with the group's founder, Bavaguthu Raghuram Shetty, seeking $15 billion in damages from the public sector lender and 25 other defendants in the Bombay High Court. According to a report by The Economic Times (ET), the suit alleges that the bank and certain current and former officials colluded with executives of Shetty's former business group in transactions that contributed to the financial crisis. The allegations have not been established in court.

The bank has responded by clarifying its position to the stock exchanges. In a filing dated October 14, Bank of Baroda said it had seen media reports of a suit said to have been filed on October 13 but had not been served with it. “The Bank has not been served with such a suit and cannot comment on the contents of pleadings which are untested in court,” it said. The lender added that it would defend the suit firmly if served.

The development comes three months after Bank of Baroda paid $600 million to settle a separate set of claims brought by NMC entities and their joint administrators. The new case raises questions about the allegations made by Shetty, the circumstances surrounding NMC's collapse and the distinction between the earlier settlement and the fresh legal challenge.

What Is Shetty Claiming?

According to ET, Shetty's lawsuit seeks $15 billion in damages under three heads: $5 billion in direct damages, $5 billion in consequential damages and another $5 billion in compensation for alleged reputational harm. The last component is sought from Bank of Baroda alone. The suit also seeks interest at 18% a year.

The allegations concern the handling of banking transactions and credit facilities linked to NMC group companies and their affiliates. Reports on the suit say Shetty has accused the bank and certain officials of ignoring anti-money laundering alerts, facilitating transactions allegedly used to move funds between related parties, and accepting documents bearing forged signatures.

Shetty has also challenged personal guarantees that he claims he did not authorise. His case is that the alleged actions contributed to financial liabilities being attributed to him and to the losses arising from NMC's collapse. These are claims made in the lawsuit, rather than findings by a court.

How NMC's Collapse Unfolded

NMC Healthcare grew into a major private healthcare provider in the UAE and was once the largest such provider in the Gulf region. Its financial position came under scrutiny in late 2019 after short-seller Muddy Waters questioned the company's financial statements, borrowings and disclosures.

The scale of the problem became clearer in 2020, when NMC disclosed debts of about $6.6 billion, substantially higher than earlier estimates. Its London-listed parent, NMC Health, entered administration in April 2020, triggering a series of investigations and legal proceedings involving the group's finances, lenders and former executives.

The collapse left creditors seeking to recover money and raised questions about undisclosed borrowings, financial reporting and transactions within the group. Bank of Baroda became involved in litigation brought by NMC entities and their administrators over banking facilities and transactions linked to the group. The resulting disputes continued across jurisdictions, including proceedings in the UK and Abu Dhabi.

What Did The $600 Million Settlement Cover?

In July 2026, Bank of Baroda agreed to pay $600 million, equivalent to about ₹5,680 crore, to settle claims brought by NMC Health PLC, NMC Healthcare Ltd, NMC Holding Ltd and their respective joint administrators.

In its July 2 exchange disclosure, the bank said the out-of-court settlement was intended to bring the disputes to a conclusion, avoiding prolonged litigation, uncertainty and associated costs. It also stated that the claims and causes of action between the parties had been resolved without an admission of liability or wrongdoing.

The settlement brought the relevant proceedings against the bank in the Abu Dhabi Global Market court and the High Court of Justice in England and Wales to an end. The bank also said the settlement payment had been made on July 1.

However, the agreement covered claims involving the NMC entities and their administrators. Shetty's new lawsuit is a separate legal action brought by him. The earlier settlement should not be interpreted as a court finding that the bank committed the alleged wrongdoing, nor does it establish the merits of the fresh claim.

The Dispute Goes Both Ways

Bank of Baroda has also said it is pursuing recovery and enforcement proceedings against Shetty in India and the UAE over outstanding dues of ₹28 billion, or ₹2,800 crore. Reuters reported on October 14 that the bank said it had obtained several decrees against him.

These recovery proceedings form a separate part of the wider dispute. The bank's claims against Shetty do not, by themselves, determine whether his allegations in the new lawsuit are valid. Similarly, the amount he is seeking does not estabish that the bank is liable for the damages claimed.

What Happens Next?

The next steps will depend on the formal legal proceedings and the arguments presented by both sides. The $15 billion is the amount Shetty is seeking, not a liability established by a court or an amount the bank has been ordered to pay. The outcome will depend on the claims, the evidence presented by the parties and the court's decisions.

For now, the lawsuit adds another chapter to the legal fallout from NMC Healthcare's collapse, even as Bank of Baroda's earlier settlement has resolved a separate set of claims brought by the group's entities and administrators.