On Thursday, annual data from Switzerland central bank exhibited that funds placed by Indian individuals and firms in Swiss banks, included through India based branches along with other financial institutions, soared up to 2.55 billion Swiss franc (around Rs 20,700 crore) in the year 2020 through a sharp rise in holdings via securities and similar instruments, even when the customers deposits dropped.
The gain in aggregate funds of Indian clients with Swiss banks from 899 million Swiss francs (Rs 6,625 crore) at the end of 2019, overturn a two year decreasing trend and has taken the figure to the highest level considering the past 13 years.
According to the Swiss National Bank data, in 2006 the fund achieved a record high of around 6.5 billion, following which it has mostly witnessed a diminishing trend, excluding few years in 2011, 2013, and 2017.
A total amount of CHF 2,554.7 million (Rs 20,706 crore), explained by the SNB as ‘total liabilities’ of Swiss Bank or ‘amount due to’ their Indian clients at the end of the year 2020 comprises of CHF 503.9 million ( around Rs 4000 crore) in customer deposits , CHF 383 million (around Rs 3,100 crore) held via other banks. CHF 2 million (Rs 16.5 crore) from fiduciaries or trusts and the highest component of CHF 1,664.8 million (almost Rs 13,500 crore) as ‘other amounts due to customers’ in the form of bonds, securities and several other financial instruments.
The funds grouped as ‘customer account deposits’ have dropped from CHF 550 million at the end of 2019. Funds through fiduciaries have more than halved from CHF 7.4 million. On the other hand, the money placed via other banks gained sharply from CHF 88 million during this period. The biggest difference is the surge in ‘other amount due to customer’ from India, which gained around six time from CHF 253 million at the end of 2019. All these four components have experienced a drop in the year 2019.
These are the official figures informed by the bank to the SNB and do not represent the quantum of the much debated rumored black money posed by Indians in Switzerland. The figures too do not consider the money that Indians, NRIs or the others might have in Swiss banks in the names of third country entities.
According to SNB, its data for ‘total liabilities’ of Swiss bank to the Indian clients considers accounts of all types of funds of Indian Customers at Swiss Bank that comprises of deposits from individuals, banks and enterprises. This involves data for branches of Swiss Banks in India, as non-deposits liabilities.
The ‘locational banking statistics’ of the Bank for International Settlement (BIS), which have been narrated earlier by Indian and Swiss authorities as more reliable measures for deposits by Indian individuals in Swiss bank exhibits a rise of almost 39 per cent in the year 2020 in such funds to USD 125.9 million (Rs 932 crore).
The above figures accounts deposits and the loans of Indian non-bank clients of swiss domiciled banks and had indicated an increase of nearly 7 per cent in 2019 following the decline of 11 per cent in the year 2018 and 44 per cent in the year 2017. In the end of 2007 it rose around USD 2.3 billion (around Rs 9,000 crore).
Swiss authorities have time and again concerned that asset placed by Indian residents in Switzerland cannot be accounted as ‘black money’ and affirmed that they actively support India in its fight against tax fraud and evasion.
Since 2018, an automatic exchange of information in tax matters between India and Switzerland have been effective. According to this framework, detailed financial information on all Indian residents having accounts with Swiss financial institutions since 2018 was given for the first time to Indian tax authorities in September 2019 and has to be continued every year.
Switzerland too haven been sharing details about accounts of Indians suspected to have involved in financial wrongdoings following the submission of prima facie evidence.
Altogether, Customer deposits in all Swiss Banks increased in 2020 to almost CHF 2 trillion including around CHF 600 billion of foreign customer deposits. According to SNB, by the end of the year 2020 there were around 243 banks in Switzerland.
