Indians’ Funds parked in Swiss Banks that Modi had promised to bring back now crosses Rs.20,000 Crores

Remember the jumla “15 – 15 lakh rupaiye harr ek Hindustani ke bank account me aayega”? Well, many Indian even voted a new party based on this jumla ! Those deposits were to be financed by the ‘Black Money’ parked in Swiss Banks. That money (not all must be ill-gotten) rather than being confiscated and brought back has now risen to Rs.20,706 Crores.

Just released, annual data presented by Switzerland’s Central Bank shows that Funds parked by Indian individuals and firms in various banks in the country, including through India-based branches and other financial institutions, has jumped to 2.55 billion Swiss francs, highest since 2006.

Though customer deposits fell, the sharp surge is fuelled due to the increase in holdings via securities and similar instruments.

The increase in aggregate funds of Indian clients with Swiss banks, up from 899 million Swiss francs (Rs.6,625 crore) at the end of 2019 to the present 2.55 billion Swiss francs (Rs.20,706 Crores), is unprecedented.

This Rs.20,706 crore, 'total liabilities' of Swiss banks as per SNB included over Rs.4,000 crore in customer deposits, over Rs.3,100 crore held via other banks, Rs.16.5 crore through fiduciaries or trusts and the highest component of nearly ₹13,500 crore as 'other amounts due to customers' in form of bonds, securities and various other financial instruments.

The figures declared are based on banks reports to SNB, and not all can be classified as much-debated alleged black money held by Indians in Switzerland. But it can be that this does include the illegal, ill gotten funds as well !

These figures also do not include the money that Indians, NRIs or others might have in Swiss banks in names of third-country entities.

However many experts now base their calculations on 'locational banking statistics' of the Bank for International Settlement (BIS), to decipher deposits by Indian individuals in Swiss banks, and this shows an increase of nearly 39 per cent during 2020 to the tune of Rs. 932 crore.

Swiss authorities have always maintained that assets held by Indian residents in Switzerland cannot be considered 'black money' and they actively support India in its fight against tax fraud and evasion.

There is an automatic exchange of information between Switzerland and India in tax matters since 2018. Under this, detailed financial information on all Indian residents with accounts in Swiss financial institutions (since 2018) has been first time provided to Indian tax authorities in September 2019 and will be followed every year.

Switzerland also has been actively sharing details about accounts of Indians suspected to have indulged in financial wrongdoings after submission of prima facie evidence. Such exchange of information has taken place in hundreds of cases so far.