State-owned Bank of Baroda has agreed to a significant $600 million settlement to resolve long-standing litigation stemming from the high-profile collapse of NMC Health, bringing an end to years of cross-border legal battles.
Key Points
- Bank of Baroda (BoB) has agreed to pay $600 million (approximately ₹5,700 crore) to settle litigation related to the collapse of NMC Health.
- The settlement amount is roughly equivalent to BoB's net profit for the January-March quarter of FY26, which was ₹5,616 crore.
- The out-of-court settlement was reached with the joint administrators of NMC Health Plc, NMC Healthcare Ltd, and NMC Holding Ltd, with payment made through BoB's Abu Dhabi branch.
- The agreement resolves all claims against Bank of Baroda without any admission of liability or wrongdoing by the lender.
- The settlement aims to conclude prolonged litigation, uncertainty, and associated costs stemming from NMC Health's 2020 administration due to undisclosed debt.
State-owned Bank of Baroda (BoB) on Thursday agreed to pay $600 million (about Rs 5,700 crore) to settle litigation arising from the collapse of NMC Health, bringing to an end years of cross-border legal proceedings linked to one of the West Asia"s biggest corporate failures.
The bank's shares fell more than 4 per cent on the BSE to close at Rs 260.15 following the announcement.
Financial Impact of the Settlement
The settlement amount of around Rs 5,700 crore is broadly equivalent to the bank"s net profit of Rs 5,616 crore for the January-March quarter of FY26.
For the full financial year, the state-owned lender reported a net profit of Rs 20,021 crore.
BoB said it had entered into an out-of-court settlement with the joint administrators of NMC Health Plc, NMC Healthcare Ltd and NMC Holding Ltd.
The payment will be made through its Abu Dhabi branch.
Terms of the Agreement
Under the settlement agreement, NMC Health, NMC Healthcare, NMC Holding and their joint administrators have resolved all claims and causes of action against Bank of Baroda without any admission of liability or wrongdoing by the lender.
The settlement amount represents the bank"s total liability in the proceedings, while the remaining terms of the agreement are confidential, the bank said in a stock exchange filing.
Following the settlement, proceedings before the Abu Dhabi Global Market (ADGM) Court of First Instance have been discontinued, while related proceedings before the High Court of Justice of England and Wales are being withdrawn.
"The above settlement is to bring the disputes to conclusion, thereby avoiding prolonged litigation, uncertainty and associated cost," the bank said.
Background of the NMC Health Collapse
The litigation stemmed from the collapse of NMC Health, once the Gulf"s largest private health care provider, which entered administration in 2020 after billions of dollars of previously undisclosed debt came to light.
The joint administrators subsequently initiated proceedings in Abu Dhabi and England against NMC founder B R Shetty, former chief executive officer Prasanth Manghat and Bank of Baroda under ADGM and UK insolvency laws, as well as UAE civil law.
Bank of Baroda has consistently denied the allegations, and the settlement expressly states that all claims have been resolved without any admission of liability or wrongdoing.
According to the bank, the agreement brings all claims between it and the NMC entities and their joint administrators to a close.
The ADGM proceedings have been discontinued, while the English proceedings are being withdrawn.
