Mint ·
Bank of Baroda saw BR Shetty's NMC Group red flags. Yet it sanctioned more loans
The court documents showed that Shetty and his companies owed Bank of Baroda ₹2,077 crore as of May 2020, which was about a third of the settlement amount the lender paid.
Bank of Baroda, which settled a legal battle involving healthcare companies founded by Abu Dhabi-based businessman BR Shetty for $600 million in July, had received internal alerts about alleged “roundtripping” of funds by the group as early as in 2016.
However, even after the bank’s own anti-money laundering (AML) unit sent at least three alerts to its Abu Dhabi branch, the state-owned lender sanctioned fresh loans to the NMC Group, according to emails and court documents reviewed by Mint.
Bankers said the cost of not acting on an AML alert is high and such failures could lead to massive implications for lenders.
