The asset reconstruction sector’s growth moderated to 15% in the previous financial year, down from nearly 32% in 2022-23, impacted by the continuous decline in gross non-performing assets (NPAs) in the banking system and the absence of major bad loan sale deals. The value of NPAs acquired by Asset Reconstruction Companies (ARCs) reached Rs 9.7 trillion as of March this year from Rs 8.48 trillion as of March 2023, according to Association of ARCs data. However, aided by strong economic growth, the redemption of security receipts by ARCs has risen by 30% in the previous fiscal. Lenders sell stressed loans to ARCs at a discount, in exchange for either cash or a mix of cash and security receipts. The security receipts are redeemable when the ARC recovers the loan.