Bank of Baroda enters 5.7k crore settlement with creditors of NMC Health

MUMBAI: Bank of Baroda has agreed to pay $600 million (about Rs 5,700 crore) to the administrators of the collapsed West Asian healthcare group NMC Health in an out-of-court settlement that brings to a close years of cross-border insolvency and fraud-related litigation, with both sides making no admission of liability and courts in Abu Dhabi Global Market (ADGM) and the UK moving to discontinue proceedings.The settlement marks a significant development in the aftermath of NRI BR Shetty promoted NMC Health's dramatic 2020 collapse, which followed a forensic audit that uncovered billions of dollars in previously undisclosed debt and alleged financial irregularities, widely estimated at $5-6 billion. The fallout triggered one of the most complex insolvency cases spanning multiple jurisdictions, with administrators seeking recoveries for creditors from a range of parties.Among those drawn into the legal battle were NMC founder Dr BR Shetty, former senior executives, and Bank of Baroda, which had emerged as one of the key lenders with exposure to the group's operations in the UAE and India. At the heart of the dispute was the administrators' contention that certain financial arrangements and lending relationships with BoB enabled the concealment of debt or allowed the company to continue operations despite insolvency. The claims sought monetary recovery to increase the size of pool available to creditors.In a separate filing, BoB said that the bank's domestic deposits for the first quarter were up 14.7% at Rs 14.2 lakh crore while domestic advances were up 16.1% at Rs 11.5 lakh crore.The settlement, as recorded in filings, resolves all such claims in exchange for the agreed payment by Bank of Baroda, which will be routed to the NMC estate managed by joint administrators. These funds will be distributed to creditors, including banks, bondholders and trade creditors, in accordance with insolvency priorities under applicable frameworks.The bank's shares have already reacted to the development, closing 4% down following the announcement, as investors factor in the immediate cost and await clarity on accounting treatment. Given the bank's balance sheet size and capital position, the settlement is seen as a manageable one-off impact rather than a systemic concern.Get the latest business news and top stories. Download the TOI App.Ready to Make a Smarter Property Decision? Build Your Legacy with TOI Homes.