Dr. B.R. Shetty, the 84-year-old founder of NMC Healthcare, has filed a civil suit in the Bombay High Court seeking $15 billion (approximately ₹1.44 lakh crore) in damages from Bank of Baroda and 25 other defendants. The allegations are explosive: Shetty claims the state-run lender served as an "instrument of fraud" through which former NMC executives siphoned funds, concealed debt, and exposed him to liabilities through allegedly forged guarantees.
The suit breaks down into three heads: $5 billion in direct damages, $5 billion for consequential losses including lost business opportunities, and another $5 billion for reputational harm against the bank alone, plus 18% annual interest. These are Shetty's unproven allegations. No court has established them, and the bank has not publicly responded to this specific suit. The bank did not respond when Business Line and Mint sought comment.
Shetty's plaint paints a picture of credit underwriting that allegedly ignored red flags for years. The bank's internal teams and regulators had reportedly flagged concerns over KYC (know your customer) lapses and unusual transactions well before NMC's collapse in 2020. Despite these warnings, the lender allegedly continued extending credit, rolled over facilities without adequate security, and concealed its true exposure from auditors.
The numbers are staggering. Shetty cites about AED 9.7 billion allegedly paid by Nexgen to NMC accounts between 2012 and 2018, with money moving through accounts held at Bank of Baroda. Another AED 3.2 billion flowed from Neopharma from 2015 onwards. These transactions, Shetty claims, were roughly 15 times the related-party purchases disclosed in NMC's accounts that the bank's own credit team reviewed. The bank allegedly handled about 69% of supplier payments to NMC companies across banks.
Perhaps most damning, Mint reported that court documents and emails show the bank's own anti-money laundering (AML) unit sent at least three alerts to its Abu Dhabi branch as early as 2016, flagging alleged "roundtripping" of funds. Yet, bank submissions in a Bengaluru court showed it sanctioned fresh loans and bank guarantees to the NMC Group from September 2017 to June 2019—after those internal red flags were raised.
The compliance failures alleged in Shetty's suit read like a case study in what not to do. The plaint claims the bank's systems generated more than 100 alerts on NMC Group accounts, but these did not lead to meaningful investigations, action to stop transactions, or reports to authorities. When a correspondent bank queried seven accounts, the branch reportedly responded that all were "NMC-related".
Shetty alleges the bank's Abu Dhabi branch "advised the Manghat team how to structure and paper those transactions so that they would pass scrutiny" and executed "every leg of the roundtripping" of funds from NMC. In one instance, about AED 42 million was allegedly paid to former NMC CEO Prasanth Manghat between May 2018 and January 2019 through an account linked to a contractor.
The suit also alleges that several loan guarantees the bank relied upon bear forged signatures and that certain accounts were operated without Shetty's authorisation. Shetty says he often signed 100-200 documents a day presented by people he trusted, and that some signatures were obtained by misleading him, while others were copied electronically or forged. Two accounts were allegedly opened in his name at the National Bank of Fujairah without his knowledge, using documents with forged signatures.
The relationship between Bank of Baroda and NMC appears to have been close. The plaint alleges that NMC executives gave gifts to bank officials, including a MacBook at a farewell dinner. It cites a document titled "Bank of Baroda Staffs_2019" that lists a MacBook, four iPad Pros, and five iPhone XS Max devices.
While the evidence on how far relationship banking compromised due diligence is thinner, the inference is clear: proximity may have blinded the bank to risks. Shetty questions the bank's position in the Abu Dhabi proceedings while it pursues recoveries from him under personal guarantees he disputes. The bank settled with NMC's administrators for $600 million without admitting liability, but Shetty argues this settlement weakens its efforts to recover dues from him based on personal guarantees arising from the same set of facts.
The $15 billion claim is approximately ₹1.44 lakh crore. To put that in perspective, it's about 85% of the bank's net worth (approximately ₹1.685 lakh crore as of June 2026) and roughly 103% of its Common Equity Tier 1 (CET1) capital of ₹1,40,428 crore. If the full claim were paid, it would cost about 14 percentage points of CET1 on estimated risk-weighted assets of roughly ₹10.1 lakh crore—wiping out the CET1 buffer entirely. Investor Presentation +1
But this is a theoretical ceiling, not a realistic estimate. The claim has three heads, and reputational damage ($5 billion) is claimed against the bank alone, while the other two heads ($10 billion) are claimed against all 26 defendants jointly. It's an unadjudicated damages claim, and Shetty's earlier $8 billion New York suit was dismissed on forum grounds in July without ruling on the merits.
The bank has already taken a significant hit. It paid $600 million (approximately ₹5,700 crore) to NMC's joint administrators on July 1, 2026, settling Abu Dhabi and English proceedings without admission of liability. Q1 FY27 standalone net profit was ₹1,278 crore, but would have been ₹5,528 crore without the exceptional item—implying a post-tax hit of about ₹4,250 crore. Return on assets was 0.25%, or 1.10% excluding the settlement. Other +2
The bank still holds a ₹2,500 crore floating provision. Q1 credit cost was 0.29%, below earlier guidance of 0.6%. I found no disclosure of any specific provision for the Shetty suit, which suggests the bank doesn't consider a loss probable at this stage. Transcript +1
The allegations engage several regulatory levers. RBI's risk-based supervision of the bank's overseas branches and its KYC-AML controls could come under scrutiny. The Audit Committee of the Board already reviews KYC-AML compliance and follows up on points raised by RBI during supervision. Staff accountability is another concern—the bank told RBI that a deputy general manager was investigating staff accountability, but the exact action taken was "not known". Other
Governance frameworks the bank discloses appear robust on paper. The Risk Management Committee held five meetings in FY26 and has a risk management specialist as an advisor to the Board. The internal audit uses a risk-based framework, with E&Y's last external review in FY2022-23 rating it robust. Compliance officers sit in each region, zone, and overseas territory, monitored from the Corporate Office. The bank runs a Central Transaction Monitoring Unit and an AML solution with rule-based alerts. Other +3
Yet the gap between policy and practice is what the court will examine. The bank's annual report in May said the NMC claims "cannot be crystallised" and that it had a robust defence. It settled weeks later. That timing and silence have raised questions about disclosure transparency.
So far, there's no visible damage to the bank's international business. Q1 FY27 international advances grew 23.3% year-on-year, against 16.1% for domestic advances. Management said overseas business has grown 15-20% for many quarters and described the bank as a major player in global syndication. The bank has 80 overseas offices across 15 countries. Transcript +2
But correspondent and syndication partners run their own compliance reviews. The concerns would be AML control weaknesses and the bank's disclosure position. The US contributes roughly 37-38% of the international book, with significant presence in the UK, Australia, Singapore, GIFT City, and the UAE. The UAE is a large exposure—net funded exposure was ₹62,212 crore in FY25 (OCR text, so verify) and ₹33,689 crore in FY21. Transcript +2
The reputational damage depends on whether the court accepts allegations of ignored alerts and on any supervisory follow-up. Shares fell 4.18% to ₹260.15 after the settlement news. I found no specific reaction to the new suit, but the $15 billion headline will be read against the $600 million settlement.
The Bombay High Court will now examine Shetty's allegations. The bank's recovery claims against Shetty on his personal guarantees continue in India and abroad. CEO Debadatta Chand told reporters in July that the recovery process against the principal individual would continue, and on staff accountability, said "every bank has its own process... either the process has been taken or will be initiated". Transcript
For investors and observers, the signals to watch are the Q2 FY27 notes to accounts for any new contingent-liability or provision disclosure, the first Bombay High Court hearings, any bank statement to the exchanges, and any RBI disclosure on supervisory action. The NMC saga is far from over, and its final chapter could reshape how Indian banks manage overseas risks.
