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Tax officials can now share data with public sector banks to help them recover dues from loan defaulters.
The Central Board of Direct Taxes (CBDT) has permitted its officials to share information on immovable properties of such defaulters following many requests from banks.
“The Board is of the view that sharing of information with PSBs in respect of assets held by defaulters of loans, so as to enable recovery of loans from such defaulters, is in public interest, and hence, can be furnished,” said the CBDT, adding that apart from the Statement of Assets, if requested, other information such as details of bank accounts, and sundry debtors of the defaulter that can help in recovery of the loan can also be provided.
The CBDT, however, stressed that the information may be provided only of the borrower, mortgager and guarantor of the loan.
Further, at the time of giving the information, a confidentiality clause must also be included and an undertaking signed by the bank that the data will be used only for recovery of the loan and will not be shared with any third party.
It has also directed its officials to ensure that any tax due against the defaulter is safeguarded in case of recovery based on the information shared.
“An undertaking may be obtained from the PSB to obtain a No Objection Certificate from the jurisdictional Principal Commissioner of Income Tax of the loan defaulter before appropriation of the surplus amount recovered from sale of immovable and movable asset of the defaulter, information in respect of which is shared,” it said.
The CBDT directive is the latest in a series of measures aimed at helping banks recover dues from defaulters, many of whom have wilfully defaulted on loans.
With a multi-pronged effort in place for recovery of bad loans, gross non-performing loans of PSBs fell by ₹89,189 crore to ₹8.06 lakh crore as on March 31, 2019.
However, experts point out that private sector banks should also be included for sharing of information as they too struggle with recovery of dues.
Amit Maheshwari, Partner, Ashok Maheshwary & Associates, said, “This directive will only aid the public sector banks in their recovery efforts and not the private sector lenders. Also, several defaulters may have already shifted their assets and may not hold significant assets in their name.”
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