The move is aimed at preventing promoters from siphoning off assets that are not disclosed to banks and comes close on the heels of the income tax department and goods and services tax authorities deciding to share details about taxpayers and defaulters with each other.
Decision to share details to banks comes in the backdrop of borrowers not disclosing complete assets to lenders to safeguard them being party of any recovery proceedings
But, banks will also have to do their bit for the department.
Banks will need to furnish no objection certificate from jurisdictional Commissioner of the loan defaulter before appropriation of the surplus amount recovered from sale of movable or immovable asset of defaulter as shared by the income tax department. I-T. Tax Authorities have been losing out in the recovery proceedings and there have been number of instances where it’s dues have not been given a priority.
“Information may be provided to the PSBs so as to aid recovery of loan from defaulter,” according to a directive issued to tax authorities seen by ET.
The department receives lot of information on assets including from returns, which will now be shared with state-owned lenders.
Details of bank accounts of borrowers besides a list of movable and immovable assets will now be made available to them.
This information will be provided in respect of taxpayers having total income in excess of Rs 50 lakh. Lenders seeking information will have to assure confidentiality of information in written.
A confidentiality clause will be part of the agreement. Moreover, only a manager level or anyone senior to him will be able to place such requests.
However, tax experts remained sceptical about how much will the direct help.
“A lot of would be defaulter promoters knowing in advance that they would default would have shifted their assets and may not hold significant assets in their name,” said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP.
He also pointed that the directive will only aid the public sector banks in their recovery efforts and not the private sector ones.