Indian banks are aggressively selling bad retail loans to asset reconstruction companies, with sales jumping from Rs 9,093 crore in September to Rs 24,814 crore in December.

Indian banks are aggressively selling bad retail loans to asset reconstruction companies, with sales jumping from Rs 9,093 crore in September to Rs 24,814 crore in December. The recovery rates have dropped significantly, with security receipts issued at just 15% of total bad loan value compared to 34% in the previous quarter. The Reserve Bank of India reports that private sector banks have added Rs 1.21 lakh crore of non-performing assets in 2024-25, primarily driven by retail segment slippages. Corporate bad loan sales have also increased, reaching Rs 44,517 crore in the December quarter. Bankers suggest these are mostly vintage NPAs already provisioned for, indicating a strategic move to clean up balance sheets and redirect focus toward credit growth rather than managing legacy assets.