Bank of Baroda draws line under NMC fraud saga with $600 million

India’s banking system is still grappling with the aftershocks of large corporate failures, with public sector lenders now leaning on chunky settlements and front‑loaded provisions to clear legacy risks and protect earnings quality. In that context, Bank of Baroda’s $600 million out‑of‑court deal in the NMC Healthcare dispute comes alongside robust operating metrics in Q1 FY27, allowing the bank to absorb the one‑off hit against a stronger balance sheet and cleaner asset profile.

Bank of Baroda has agreed to pay $600 million (about ₹5,700 crore) via its Abu Dhabi branch to the joint administrators of UAE‑based NMC Health under a settlement that ends years‑long litigation in Abu Dhabi Global Market and the UK, with all claims resolved and no admission of liability.

The announcement came as the bank reported double‑digit year‑on‑year growth in both deposits and advances, with global business crossing roughly ₹30.5 trillion and domestic advances rising over 16 percent, supported by improving asset quality indicators. Gross NPAs have eased to nearly the mid‑2 percent range, net NPAs to well below 1 percent, backed by a provision coverage ratio upwards of 93 percent and credit cost contained under 0.5 percent, giving BoB headroom to manage the NMC‑linked payout without destabilising capital.

While the stock fell over 4 percent on July 2 as investors priced in the immediate impact, the bank is pitching the settlement as a manageable, balance‑sheet‑friendly clean‑up that removes a major legal overhang and lets management refocus on growth, recoveries and return ratios.
MB Bureau