Post Charge-Off Recovery AI

INVOKED WHEN: a new ARC is being assessed for empanelment, or the annual ARC performance review is due

• –Reads the ARC's track record data — recovery rates on comparable portfolios by sector, DPD band, ticket size, and geography; RBI registration status; and any conduct complaints or regulatory actions — and produces an empanelment assessment rating the ARC on recovery capability, sector fit, conduct record, and financial stability.
• –For the annual review: compares each empanelled ARC's actual recovery rate on LendingIQ's allocated accounts against the rate promised at empanelment, identifying ARCs consistently underperforming their empanelment promise.
• –Does not empanel or terminate ARCs. The assessment is delivered to the collections manager for the decision.

INVOKED WHEN: management decides to sell a tranche of written-off accounts to an ARC or investor

• –Reads the write-off register and selects accounts matching the tranche criteria — by sector, ticket size, security type, vintage, and prior recovery activity — and prepares the data package: loan-level data, portfolio summary statistics, and the data tape format required by prospective ARC buyers.
• –Computes the indicative reserve price based on comparable portfolio sale benchmarks — the floor below which the sale is unlikely to generate better recovery than continued ARC management. Does not execute the portfolio sale or sign any assignment agreement.

INVOKED WHEN: CBS posts a cash receipt against a written-off account

• –Reads CBS recovery postings against written-off accounts and updates the recovery tracker — logging the recovery amount, date, account, and channel (ARC, legal decree, voluntary payment, portfolio sale proceeds). Computes cumulative recovery rate for each written-off vintage.
• –Tracks recovery rates by ARC allocation, sector, and DPD-at-write-off — identifying which segments are recovering well and which are not, informing future ARC allocation decisions.