Bank of Baroda seals $600 million NMC Health settlement to end years of litigation

The public sector lender has cleared a major legacy hurdle by paying Rs 5,700 crore to resolve insolvency-related claims across UAE and UK jurisdictions.

For Bank of Baroda, the long shadow of the NMC Health collapse has finally lifted. The Mumbai-headquartered lender confirmed on Thursday that it has reached an out-of-court settlement with the healthcare group’s joint administrators, agreeing to a payment of $600 million—roughly Rs 5,700 crore—to put an end to a high-stakes legal battle that had traversed both Abu Dhabi Global Market (ADGM) and British courts.

The dispute, which followed the 2020 revelation of over $4 billion in hidden debt at the UAE-based firm founded by BR Shetty, had placed the bank in a difficult position. Administrators had alleged that the lender facilitated financing arrangements based on questionable invoices and undisclosed borrowings. Bank of Baroda consistently denied any wrongdoing, and the current settlement contains no admission of liability, serving primarily to shutter proceedings and contain further legal costs.

Clearing the balance sheet

The settlement, paid through the bank’s Abu Dhabi branch, effectively draws a line under a chapter that had become a source of significant uncertainty for investors. While the $600 million outflow is substantial, the bank has moved to cap its financial exposure, ensuring no further hidden liabilities remain in this specific matter. The formal discontinuation of proceedings in the ADGM is already underway, with the English litigation following suit.

Market reaction was swift, with shares of the bank dipping 4.18% to Rs 260.15 on the BSE on Thursday. Despite the immediate impact on equity prices, the move is widely viewed by analysts as a strategic necessity to clear legacy baggage that had hampered the bank’s visibility.

The bigger picture: Growth amid volatility

Even as it navigates the aftermath of this settlement, the bank’s operational performance shows resilience. In a separate regulatory filing, the lender reported a robust 17% growth in total credit for the first quarter of FY27, taking the outstanding figure to Rs 14.17 lakh crore. Deposits also saw a healthy 14% uptick to Rs 16.3 lakh crore.

Why this matters is clear: by shedding the weight of the NMC Health litigation, the bank is signaling a pivot toward its core lending ambitions. With total business—the sum of credit and deposits—rising 15% to Rs 30.5 lakh crore, the leadership is clearly banking on its domestic growth engine to offset the one-time hit from the international settlement. For a public sector giant aiming to scale up, this closure provides the clean slate needed to focus on its targets for the upcoming fiscal years.