New Delhi, Nov. 11 -- After two consecutive quarters of decline, India's bad loan recovery business has posted a modest rebound, led by a sharp rise in retail loan sales to asset reconstruction companies (ARCs).

The ARC portfolio turned positive in the September 2025 quarter, coinciding with banks accelerating NPA sales ahead of the RBI's new expected credit loss (ECL) framework.

The new framework mandates provisioning based on default probability rather than loan duration. The shift is driving lenders to offload assets earlier and improve reported balance sheet health.

According to data compiled by the Association of ARCs in India (AARCI), fresh ARC acquisitions rose to Rs 6,721 crore in the September quarter, compared to Rs 4,388 cro...