Internal documents and emails reveal that Bank of Baroda's (BoB) own compliance systems flagged over 100 anti-money laundering (AML) alerts concerning NMC Health group accounts. These alerts, generated in the context of an alleged round-tripping scheme, were reportedly ignored by bank officials handling and sanctioning loans worth millions to NMC Healthcare.
Dr. BR Shetty, the Indian-born founder of Abu Dhabi-based NMC Healthcare, has now filed a lawsuit against Bank of Baroda and several officials in the Bombay High Court, seeking approximately $15 billion in damages. BoB, however, states it has not been officially served with such a suit and will firmly defend its interests if and when it is.
Allegations of Disregarded Warnings
Sources indicate that none of the more than 100 AML alerts resulted in a meaningful inquiry, escalation, or official report. For instance, in January 2016, a zonal officer requested the Abu Dhabi branch to check KYC details and AML alerts for seven NMC-related accounts, citing a correspondent bank's concern. Later, in September 2016, BoB's Anti-Money Laundering Compliance Team directly flagged potential "round-tripping" in NMC group accounts, noting funds moving without economic purpose and calling for a review. Despite these warnings, the alleged transfers continued for over three years.
Dr. Shetty claims he was never informed about these flagged transactions. When BoB later reported the matter to the Reserve Bank of India, it stated the fraud only came to light via a forensic audit, omitting any mention of the 2016 AML alerts. This suggests the bank may have detected warning signs but continued its dealings regardless.
The $5.4 Billion Fraud Case
The alleged fraud against Dr. BR Shetty involves $5.4 billion, with a trial commencing in Abu Dhabi in April. Allegations suggest Shetty orchestrated this fraud, driving NMC Healthcare into debt, and that further transactions through loans from BoB and other banks were used to cover it up. This also impacted thousands of investors on the London Stock Exchange.
The collapse began after a December 2019 report by short seller Muddy Waters questioned NMC's balance sheets, leading to disclosures of over $6.6 billion in debts. Dr. Shetty, who founded New Medical Centre in 1975 and built it into the UAE's largest private healthcare provider, states he relinquished control to Prasanth and Promoth Manghat between 2016-2017 to focus on philanthropy. He alleges that every BoB facility now in default is dated after this handover, and that his signatures on personal guarantees for these loans were forged.
Collusion and Undisclosed Lending
Legal documents filed by Dr. Shetty allege that Bank of Baroda colluded with its officers to defraud the companies. Findings previously attributed to Alvarez & Marsal claim the bank participated in the round-tripping scheme, discounting forged invoices. Correspondence from 2015 reportedly shows a BoB officer demanding invoices for high-value transfers and later suggesting how to "structure the transactions in an acceptable manner."
It is further alleged that BoB granted unsecured financial facilities that were not disclosed to NMC's boards. In March 2020, NMC reported over $2.7 billion in facilities never approved by its board. When the group's exposure neared UAE limits, facilities were allegedly shifted to BoB's Dubai International Financial Centre branch to enable continued lending despite internal doubts about the accounts.
Nil Collateral and Suspected Gratification
Bank of Baroda reportedly granted loans totaling approximately ₹2,000 crore without adequate collateral. In Karnataka High Court proceedings, when questioned about security for such large exposures, BoB's counsel cited the borrowers' listing on the London Stock Exchange and their high net worth, but details of tangible assets were not provided. The court expressed concern over public sector banks permitting such exposures without proper security.
Shetty's legal team also points to evidence of corruption, citing a forensic review that allegedly uncovered a message detailing a gift (an Apple iPad Pro) sent to a BoB official in 2016, with other high-value gifts and payments to bank employees also mentioned.
The Aftermath: Settlement and Public Cost
After the fraud emerged in February 2020, BoB allegedly sought to place the entire blame on Shetty, filing cases against him and issuing a Look Out Circular. The Karnataka High Court later ruled this circular, which unlawfully prevented Shetty from leaving India for over three and a half years, was invalid for civil recovery purposes.
In July 2026, BoB announced an out-of-court settlement of approximately $600 million (around ₹5,700 crore) with the joint administrators of NMC Health PLC and its subsidiaries. The bank denied liability or wrongdoing but settled claims that were reported close to $5.4 billion. Notably, BoB had made no financial provision for these claims, stating in its annual report that it had a strong chance of defending the case successfully.
The total cost to the public exchequer is estimated at no less than ₹8,000 crore, factoring in the ₹5,700 crore settlement and approximately ₹2,800 crore in unrecoverable loans from BoB and Punjab National Bank. Shetty, now 84, states he is left to bear the remaining burden.