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Informist, Wednesday, Jul. 8, 2026

 

MUMBAI – Equity brokerage Zerodha Broking Ltd. Wednesday said Bank of Baroda's recent $600 million settlement in a litigation case in Abu Dhabi on a "collapsed hospital chain in the Middle East" poses larger questions about the response of the regulator and the bank board. It said the case merited a run of the same playbook seen when private-sector banks fall short on compliance.

 

The brokerage said Bank of Baroda has had to pay around INR 57 billion ($600 million) due to an overseas branch in Abu Dhabi being "accused of processing fraudulent flows and executives testifying to clearing hundreds of AML (anti-money laundering) alerts an hour". Had the same incidents taken place with an Indian private-sector bank, "it isn't hard to imagine" that there may have been a "sharp regulatory response, hard questions for the board and maybe restrictions on the business," Zerodha said in a post on its official Substack and on its X account.

 

The brokerage said when banks such as Kotak Mahindra Bank, HDFC Bank, and Paytm Payments Bank fell short on compliance and technology, the Reserve Bank of India had "moved fast and hard with direct penalties". The state-owned bank, however, "may tend to get a gentler ride", it said.

 

Zerodha said such asymmetry was highlighted nearly a decade ago by then RBI governor Urjit Patel, who said the banking regulator felt restrained when it came to taking action against the board of a state-owned bank since some members are appointed by the government, which has majority ownership in the bank. "The finance ministry and the RBI would both have had to intervene for a settlement this size. Yet there's little visible sign of anyone inside the bank answering for the loss," the brokerage said in its post.

 

The case pertains to NMC Health, the healthcare provider in the United Arab Emirates operating hospitals, clinics, and pharmacies, and founded by B.R. Shetty, an Indian tycoon based in the region. After the US-based short-seller Muddy Waters published a report on NMC's debt accounts and how the company had been lying about how much it owed, the case got exposed, according to Zerodha.

 

The case in the Abu Dhabi Global Market Court of First Instance and the High Court of Justice of England & Wales involved proceedings under Abu Dhabi and UK insolvency laws and UAE civil law in which NMC Group companies and their respective joint administrators had pressed for claims against NMC's former management officials, Shetty, and Bank of Baroda, among other creditors. Allegations were made that the fraud was carried out by NMC's former management with the knowledge and collusion of the bank. The bank was alleged to have had a front-seat view of the whole scheme that transpired between 2012 and 2020, since it was not just a lender but also a transaction bank processing payments, trade finance, and account flows for NMC.

 

Bank of Baroda had in its annual report for the financial year 2025-26 (Apr-Mar) disclosed details of the case but argued that claims against the bank "cannot be crystallized at this stage given the Bank's robust defence in facts and law". Zerodha said the $600 million settlement announced by Bank of Baroda Thursday meant its "biggest overseas cloud is gone, and investors at least know the number now", but the NMC saga may drag on, given that the administrators are still pursuing Shetty and others for creditor losses of over $5 billion. Further, the price of the settlement includes the dilemma of who is meant to answer when a state-owned bank "loses" INR 57 billion.

 

Wednesday, shares of Bank of Baroda closed at INR 240.45 on the National Stock Exchange, down 3% from Tuesday.  End

 

US$1 = INR 95.55

 

Reported by Rajesh Gajra

Edited by Rajeev Pai

 

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