The founder of NMC Health , Bavaguthu Raghuram Shetty, has initiated a sweeping $15 billion damages lawsuit in the Bombay High Court , naming Bank of Baroda and 25 other co-defendants as parties to a multi-year fraud and negligence scheme. This fresh litigation, filed in mid-October 2026 , alleges that the public sector lender acted as a crucial instrument in the systematic siphoning of funds from the NMC group, leading to the collapse of what was once the largest private healthcare provider in the Gulf region. Shares of Bank of Baroda fell by 3% in early trading following the news, reflecting investor concerns over the massive claim and potential reputational fallout for the financial institution.

The lawsuit seeks $5 billion in direct damages for the alleged fraud, $5 billion in consequential losses stemming from lost business opportunities, and an additional $5 billion for reputational harm. Furthermore, the plaintiff has requested an 18% annual interest rate on the first $10 billion of the claim, starting from the date of the suit's institution. In response to the market volatility and media reports, Bank of Baroda issued a formal statement to stock exchanges, asserting that while it has not yet been served with the lawsuit, it is prepared to contest the allegations vigorously.

Allegations of Financial Misconduct and Forgery

Central to the plaint is the assertion that Bank of Baroda officials knowingly facilitated round-tripping transactions and ignored repeated anti-money laundering alerts generated by the bank’s own compliance systems. Shetty, who is 84 years old, alleges that he was effectively sidelined from the daily operations of his business empire between 2012 and 2017 while Prasanth Manghat and Promoth Manghat assumed control over group finances.

According to the filing, the Manghat brothers and their associates utilized accounts in Shetty’s name and those of purported supplier entities to move funds between group companies, creating the appearance of genuine commercial activity. The suit alleges that the bank provided the necessary infrastructure to facilitate these transfers, specifically highlighting accounts maintained at the bank's Abu Dhabi branch.

One of the most significant claims involves the use of personal guarantees and loan documentation bearing allegedly forged signatures. Shetty contends that he did not execute these instruments and that his signature was reproduced from an electronic template without his consent. The suit draws upon expert analysis, including reports from the Arab Laboratory for Technical Examination , which concluded that signatures on various documents were fabricated. The plaintiff further claims that more than 100 internal money-laundering alerts were closed by bank staff without sufficient investigation, disregarding warnings that had been raised internally regarding the movement of funds between borrowing accounts and purported third-party suppliers.

The Bank’s Defense and Procedural Context

Bank of Baroda has maintained that the claims are untested in court and has emphasized that previous proceedings have not substantiated allegations of wrongdoing on its part. The lender specifically pointed to its recent out-of-court settlement with the joint administrators of NMC Health in July 2026 . In that instance, the bank agreed to pay approximately $600 million to resolve litigation in the United Kingdom and the Abu Dhabi Global Market, expressly noting that the payment was made without any admission of liability .

In its statement to regulators, the bank noted that it is itself actively pursuing recovery and enforcement proceedings in India and the United Arab Emirates against Shetty for outstanding dues of approximately ₹2,800 crore. The lender has also highlighted that a similar lawsuit filed by the businessman in the Supreme Court of the State of New York , which made overlapping allegations of fraud and negligence, was dismissed in July 2024 .

The bank also referenced ongoing judicial proceedings, stating that judgment has been reserved against Shetty and Prasanth Manghat in the Abu Dhabi Global Market Court regarding allegations of fraud and wrongful trading . By contrasting these existing actions with the new Bombay High Court filing, the bank aims to characterize the latest $15 billion suit as a strategic maneuver rather than a grounded legal claim. Furthermore, the lender underscored that a 2021 order from the Karnataka High Court had previously restrained the NMC founder from alienating his assets , a decision that followed his assertion of insolvency before the National Company Law Tribunal .

Implications for Future Litigation

The legal battle carries significant implications for the bank's contingent liability disclosures and its ongoing strategy for managing cross-border credit recovery . Shetty’s legal team has argued that the $600 million settlement paid to the NMC administrators does not extinguish his separate claims, as he was not a party to those agreements. By seeking the production of original guarantees and internal compliance records, the plaintiff aims to challenge the bank’s contention that it was merely a deceived lender.

The outcome of this case hinges on the court’s evaluation of the alleged collusion between internal bank staff and the former management of the NMC group. For now, the bank has assured stakeholders that it will not bear any immediate financial liability unless a judicial order is passed, and it remains focused on defending its current enforcement proceedings. As the Bombay High Court prepares to address the procedural requirements of this massive suit, the financial markets will continue to monitor the bank’s disclosures and any future developments concerning its contingent liabilities. The case remains in its preliminary stages, with the bank yet to be formally served, setting the stage for what is likely to be a protracted legal conflict over the collapse of one of the most prominent business empires in the region.