Indian Money In Swiss Banks Rises 50% Reversing Three-Year Decline
Funds parked by Indians in Swiss banks grew in 2017 as it reversed a three-year downtrend amid India’s clampdown on suspected black money stashed overseas.
Indians’ money in Swiss banks rose 50 percent year-on-year to 1.01 billion Swiss francs (about Rs 7,000 crore) , according to the official annual data released by the Swiss National Bank today. The central bank of Switzerland added that the total funds held by all foreign clients of Swiss banks rose about 3 percent to 1.46 trillion Swiss francs or about Rs 100 lakh crore in 2017.
The surge comes as a surprise as India has been trying various measures to keep a check on the money hoarded abroad, one of Prime Minister Narendra Modi’s long-standing campaign promises. Tax agencies in India are even offering incentives for people who can tip them off with information.
Money in Swiss banks from India had fallen 45 percent in 2016, marking the biggest ever yearly plunge, to 676 million Swiss francs (about Rs 4,500 crore). That was the lowest ever since the European nation began making the data public in 1987.
According to the SNB data, the total funds held by Indians directly with Swiss banks rose to 999 million Swiss francs (Rs 6,891 crore) in 2017, while the same held through fiduciaries or wealth managers increased to 16.2 million Swiss francs (Rs 112 crore). These figures stood at 664.8 million Swiss francs and 11 million Swiss francs, respectively, at the end of 2016.
As per the latest data, the Indian money in Swiss banks included 464 million Swiss franc (Rs 3,200 crore) in the form of customer deposits, 152 million Swiss franc (Rs 1,050 crore) through other banks and 383 million Swiss franc (Rs 2,640 crore) as ‘other liabilities’ such as securities, at the end of 2017.
The funds under all three heads have risen sharply, as against a huge plunge across all categories in the previous year, the SNB data showed. The total funds held by Indians with Swiss banks stood at a record high of 6.5 billion Swiss franc (Rs 23,000 crore) at the end of 2006, but came down to nearly one-tenth of that level in about a decade.
Since those record levels, this is only the third time when there has been a rise in Indians’ money in Swiss banks – in 2011 (12 percent), 2013 (43 percent) and now in 2017 by 50.2 percent, this is the maximum increase since 56 percent way back in 2004.
The latest data from Zurich-based SNB comes months after a new framework having been put in place for automatic exchange of information between Switzerland and India to help check the black money menace.
While Switzerland has already started sharing foreign client details on evidence of wrongdoing provided by India and some other countries, it has agreed to further expand its co-operation on India's fight against black money with a new pact for automatic information exchange.
There were several rounds of discussions between Indian and Swiss government officials on the new framework and also for expediting the pending information requests about suspected illicit accounts of Indians in Swiss banks.
The funds, described by SNB as ‘liabilities’ of Swiss banks or ‘amounts due to’ their clients, are the official figures disclosed by the Swiss authorities and do not indicate to the quantum of the much-debated alleged black money held by Indians there.
SNB's official 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.