look news india
Public sector veterans Bank of Baroda (BoB) has decided to end forever the years-long dispute regarding ‘NMC Health’, one of the biggest corporate scams in West Asia. The bank has appointed joint administrators to resolve this complex legal battle out of court. $600 million (about Rs 5,700 crore) Has agreed to pay a huge amount. After this historic settlement, the fraud and insolvency proceedings going on in many countries including Abu Dhabi, Britain and India will now be completely stopped. However, the most important thing about this agreement is that neither of the parties has accepted any kind of mistake or legal responsibility in front of the court.
What is the $5-6 billion NMC health scam, which shook the banking sector?
This whole matter is about NRI businessman. Dr. BR Shetty It is associated with ‘NMC Health’, a healthcare group promoted by NMC, which suddenly collapsed like a house of cards in the year 2020. An independent forensic audit had sensationally revealed that the company’s management had defrauded the lenders by nearly Huge debt of 5 to 6 billion dollars (about Rs 40,000 to 50,000 crore) Kept it completely hidden from the books of accounts.
After this big financial fraud came to light, there was a stir in the global banking sector and investigative agencies of many countries became active. Since Bank of Baroda was one of the most prominent banks giving loans to this group in UAE and India, the name of the bank was also dragged into this legal dispute.
What were the allegations against Bank of Baroda and where will the settlement money go?
The Joint Administrators, who were handling the affairs of the company after the bankruptcy of NMC Health, alleged that certain financial arrangements and credit facilities made with Bank of Baroda had helped NMC hide its bad debts. The administrators claimed that this was the reason why the company remained in the market for a long time despite being completely hollow and the creditors suffered huge losses.
-
Use of money: Under the agreement, ₹5,700 crore given by Bank of Baroda will be transferred to the estate of NMC, which is being looked after by court-appointed administrators.
-
Who will get the benefit: This huge fund will be used to repay the outstanding money of global banks, bondholders and commercial creditors, whose billions of rupees were at stake due to the collapse of NMC Health.
There will be no bad impact on business, bumper increase in deposits and loans in Q1
Even though Bank of Baroda has to pay a huge sum of ₹ 5,700 crore in one lump sum, it will not have any significant negative impact on the health of the bank’s core banking business and balance sheet. The bank has made it clear in its latest financial report that its core business has performed well in the first quarter (Q1) of the current financial year:
-
Domestic Deposits: With a strong growth of 14.7 percent on an annual basis Rs 14.2 lakh crore But has reached.
-
Domestic Loan (Domestic Advances): A strong jump of 16.1 percent has been recorded in credit growth, after which the total loan book Rs 11.5 lakh crore Has crossed the level of.
As soon as the news came, investors started selling in the stock market, shares fell by more than 4%.
Despite strong business fundamentals, stock market investors took a profit-booking and selling stance, sensing this sudden financial shock of ₹5,700 crore. Immediately after the official announcement of this mega settlement by Bank of Baroda, huge pressure was seen on its shares during the trading session on Thursday. Due to all round selling Bank of Baroda’s share (BoB Share Price) fell by more than 4 percent. closed in the red with. However, market experts believe that ending this years-old legal dispute forever can prove to be a positive step for the bank’s reputation in the long run.