Opinion STASH YOUR LOOT ELSEWHERE

L.K. Advani recently asked the UPA to pressure Swiss banks to reveal their Indian account holders. Vinay Sitapati explains the context:

March 31, 2009 12:59 AM IST First published on: Mar 31, 2009 at 12:59 AM IST

Whats the fuss all about?

The United States justice department had accused Switzerlands biggest bank UBS of helping 17,000 Americans hide their money in secret bank accounts to avoid paying tax. To avoid prosecution,UBS has agreed to pay 780 million dollars and disclose the names of some secret bank accounts. This has set off a domino effect,with British Prime Minister Gordon Brown also calling for such action. The famed secrecy of Swiss banking is under threat.

Whats the India connection?

In a 2006 report,the Swiss Banking Association said that Indians had the most money in Swiss bank accounts,totalling 1,456 billion dollars. The CPM was the first party to up the ante. In February 2009,the politburo in a statement asked the UPA government to pursue details of Indians with Swiss bank accounts: If the government is serious about stopping black money and raising resources to meet the growing economic crisis,it must take steps to bring back the unaccounted,ill-gotten wealth of Indians from abroad. JD (U) President Sharad Yadav seconded this. More recently,BJPs prime ministerial candidate reiterated this demand,asking Prime Minister Manmohan Singh to raise the issue in the upcoming G-20 summit.

So,are the Swiss worried?

You bet they are. Banking forms an integral part of the Swiss economy,and their reputation for secrecy acts as a magnate for funds. The Swiss also have more immediate concerns the risk that their bankers travelling abroad will be arrested by governments eager for information on bank accounts. To mitigate this risk,Financial Times has reported that Switzerlands private banks have started to ban their top executives from travelling abroad.