The amount of money parked in Swiss banks by Indian people and businesses increased to 2.55 billion Swiss francs (about Rs 20,700 crore) in 2020, PTI reported on Thursday, citing yearly data from Switzerland’s central bank.
The deposits peaked at 6.5 billion Swiss francs (about Rs 52,500 crore) in 2006, and have since largely declined, save for a few years in 2011, 2013, and 2017, according to Swiss National Bank data.
This is an increase of more than 183 percent from the end-of-year figure of 899 million Swiss francs (Rs 6,625 crore).
However, the increase in deposits this year comes with a caveat. In fact, funds designated as “client account deposits” have decreased from 550 million Swiss francs (approximately Rs 4,442 crore) in 2019 to 503.9 million in 2020. (over Rs 4,000 crore). Additionally, the amount held by fiduciaries and trusts decreased from 7.4 million Swiss francs (Rs 59.76 crore) to 2 million Swiss francs (Rs 16.5 crore).
Swiss tax authorities transmitted the first batch of information regarding Indian clients’ financial accounts with Swiss banks with India in October 2019 under the two countries’ automatic information exchange mechanism. The finance ministry, however, has refused to release details of the data, claiming that such disclosures are forbidden by the “confidentiality provisions” of an India-Switzerland tax treaty.
However, deposits through bonds, securities, and many other financial instruments increased significantly during this period, from 253 million Swiss francs (Rs 2,043 crore) to 1.66 billion Swiss francs (almost Rs 13,500 crore).
The Swiss National Bank’s annual report contains a compilation of official figures submitted to the central bank by various individual banks in the country. However, according to PTI, this data does not account for alleged “black money” stored by Indians in Switzerland. It excludes funds held by Indians in Swiss banks in the names of third-country corporations.
Meanwhile, the Bank for International Settlements’ “locational banking statistics” indicate a roughly 39 percent growth in Indian deposits in Swiss banks to $125.9 million in 2020. (Rs 932 crore). According to PTI, Indian and Swiss authorities have previously identified this data as a more credible indicator of Indian citizens’ deposits in Swiss banks.
The statistic, which includes both account deposits and loans to non-bank Indian clients of Swiss-domiciled banks, increased by 7% in 2019.
Customer deposits across all Swiss banks increased to about CHF 2 trillion in 2020, including more than CHF 600 billion in foreign customer accounts. While the United Kingdom led the charts for foreign clients’ money in Swiss banks with CHF 377 billion, the United States came in second with CHF 152 billion – the only two nations with client funds in excess of $100 billion.
The West Indies, France, Hong Kong, Germany, Singapore, Luxembourg, Cayman Islands, and Bahamas rounded out the top ten. India was ranked 51st, ahead of New Zealand, Norway, Sweden, Denmark, Hungary, Mauritius, Pakistan, and Bangladesh.
India was ranked third among the BRICS nations, after China and Russia but ahead of South Africa and Brazil. Netherlands, United Arab Emirates, Japan, Australia, Italy, Saudi Arabia, Israel, Ireland, Turkey, Mexico, Austria, Greece, Egypt, Canada, Qatar, Belgium, Bermuda, Kuwait, South Korea, Portugal, Jordan, Thailand, Seychelles, Argentina, Indonesia, Malaysia, and Gibraltar were also ranked higher than India.
The United States and the United Kingdom were among the nations for which Swiss banks reported a reduction in client balances, while money stored by individuals and businesses in Bangladesh also decreased in 2020. However, in the instance of Pakistan, the amount nearly doubled to over CHF 642 million.
Bhoi Smrutirekha Dharanidhar