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Indians’ money in Swiss banks falls by 6 per cent; 2nd-lowest level in over two decades

Total foreign deposits in Swiss banks also fell by over 4% to CHF 1.4 trillion (nearly Rs 99 lakh crore) in 2018, as per statistics released by central banking authority of Switzerland.

Black money, Swiss banks, Tax haven, untaxed income, Narendra Modi, Indian accounts in swiss banks, Indian Express Total foreign deposits in Swiss banks also fell by over 4 per cent to CHF 1.4 trillion (nearly Rs 99 lakh crore) in 2018, as per the annual banking statistics released by the Zurich-based central banking authority of Switzerland.

Deposits by Indians in Swiss banks, including through India-based branches, reduced by nearly 6 per cent in 2018 to CHF (Swiss Franc) 955 million (about Rs 6,757 crore), its second-lowest level in over two decades, Swiss National Bank (SNB)_ data showed on Thursday.

Total foreign deposits in Swiss banks also fell by over 4 per cent to CHF 1.4 trillion (nearly Rs 99 lakh crore) in 2018, as per the annual banking statistics released by the Zurich-based central banking authority of Switzerland, PTI reported. Similar trend was also visible in ‘locational banking statistics’ of the Bank for International Settlement (BIS), which was last year cited by the Indian and Swiss governments as a more reliable measure for deposits by Indian individuals in Swiss banks. It showed a fall of 11 per cent for 2018.

According to the SNB, its data for ‘total liabilities’ of Swiss banks towards Indian clients takes into account all kinds of funds of Indian customers at Swiss banks, including deposits from individuals, banks and enterprises. This includes data for branches of Swiss banks in India, as also non-deposit liabilities.

The funds, described by the SNB as ‘liabilities’ of Swiss banks or ‘amounts due to’ their clients, are the official figures reported by the banks and do not indicate the quantum of the alleged black money held by Indians there. The official SNB figures also do not include the money that Indians, NRIs or others might have in Swiss banks in the names of entities from different countries.

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The SNB data had shown the total liabilities of Swiss banks towards Indian clients rising by over 50 per cent in 2017 to CHF 1.01 billion (Rs 7,000 crore), reversing a three-year downward trend. However, the quantum of such funds has fallen again in 2018 to CHF 954.71 million, which includes about CHF 15 million held through fiduciaries or wealth managers.

This is the second-lowest total since CHF 723 million recorded over two decades ago in 1995. The lowest ever amount of CHF 675 million, ever since Switzerland began making the data public in 1987, was recorded in 2016.

As per the latest figures, the total customer deposits of Indian clients rose to CHF 572 million in 2018, but funds held through banks fell to CHF 104 million, while money parked through securities and other instruments and via fiduciaries also declined. On the asset side, Swiss banks saw a marginal increase in the amount due from their Indian customers to CHF 212 million (from CHF 210 million in 2017).

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The BIS data showed that the total amount outstanding to non-bank or individual Indian clients of Swiss banks fell to $84.6 million at the end of 2018 (by 11 per cent from $94.8 million at the end of 2017). The fall was much larger at 44 per cent during 2017. The BIS publishes quarterly figures, which shows that these funds rose during the first quarter of 2018 (to $100.9 million), but declined in the three remaining quarters of the year. The annual SNB data has shown a decline four times during the last five years.

The fall was the maximum at 45 per cent in 2016.

The total funds held by Indians with Swiss banks stood at a record high of CHF 6.5 billion (Rs 23,000 crore) at 2006-end, but came down to nearly one-tenth of that level in about a decade. Since those record levels, there has been a rise only three times — in 2011 (12 per cent), 2013 (43 per cent) and then in 2017.

India and Switzerland had, for automatic sharing of financial account information, signed a Joint Declaration on November 22, 2016 for activation of the Automatic Exchange of Information (AEOI) in tax matters between the two countries.

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From September 2019 onwards, India will receive information about financial accounts held by Indian residents in Switzerland for the calendar year 2018 and subsequent years, which would help the authorities to trace unaccounted income and assets of Indian residents in Switzerland and bringing the same to tax.

The use and disclosure of the information received is though governed by the confidentiality provisions of the India-Switzerland tax treaty.

While Switzerland has already begun sharing foreign client details on evidence of wrongdoing provided by India and some other countries, the new framework would expand the cooperation. The tax department had detected suspected black money running into thousands of crores of rupees post investigations on global leaks about Indians stashing funds abroad and has launched prosecution against hundreds of them, including those with accounts in the Geneva branch of HSBC.

First published on: 28-06-2019 at 04:07:59 am
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