In 2020, the amount of money parked in Swiss banks by Indian people and businesses, including through India-based branches and other financial institutions, reached 2.55 billion Swiss francs (over Rs 20,700 crore), notwithstanding a drop in consumer deposits, on a strong increase in assets through securities and similar instruments, Switzerland central bank data released on Thursday revealed annual figures.
The increase in total money held by Indian clients with Swiss banks, from 898 million Swiss francs (Rs 6,625 crore) at the end of 2019, reverses a two-year downward trend and brings the amount to its highest level in 13 years. According to Swiss National Bank (SNB) data, it peaked at about 6.5 billion Swiss francs in 2006, after which it has generally been on a declining trend, with a few exceptions in 2011, 2013, and 2017.
The SNB described the total amount of CHF 2,554.7 million (Rs 20,706 crore) as 'total liabilities' of Swiss banks or 'amounts due to' their Indian clients at the end of 2020. It included CHF 503.9 million (over Rs 4,000 crore) in customer deposits, CHF 383 million (over Rs 3,100 crore) held via other banks, CHF 2 million (Rs 16.5 crore) held through fiduciaries or trusts, and the highest component of CFD
While funds kept in 'customer account deposits' have decreased from CHF 550 million at the end of 2019, and those held through fiduciaries have more than halved from CHF 7.4 million, money held through other banks has increased dramatically from CHF 88 million.
The biggest difference, however, has been a six-fold increase in 'other amounts due to clients' from India, from CHF 253 million at the end of 2019. During the year 2019, all four components had decreased. These are official data provided to the SNB by banks and do not reflect the amount of alleged black money held by Indians in Switzerland.
These figures also exclude any funds held in Swiss banks in the names of third-country businesses by Indians, NRIs, or others. According to the SNB, its data on Swiss banks' "total liabilities" to Indian clients includes all forms of funds held by Indian customers with Swiss banks, including deposits from individuals, banks, and businesses. This covers information about Swiss bank branches in India as well as non-deposit liabilities.
On the other hand, the Bank for International Settlements' (BIS) 'locational banking statistics,' which have previously been described by Indian and Swiss authorities as a more reliable measure for deposits by Indian individuals in Swiss banks, show a nearly 39 percent increase in such funds to USD 125.9 million in 2020. (Rs 932 crore).
This figure includes both deposits and loans from Indian non-bank clients of Swiss-domiciled banks, and it increased by 7% in 2019 after falling by 11% in 2018 and 44% in 2017. At the end of 2007, it had reached a high of over $2.3 billion (about Rs 9,000 crore).
Swiss authorities have consistently maintained that assets owned by Indian residents in Switzerland are not 'black money,' and they actively support India in its fight against tax fraud and evasion.
Since 2018, there has been an automated exchange of information on tax cases between Switzerland and India. In September 2019, full financial information on all Indian residents with accounts with Swiss financial institutions since 2018 was sent to Indian tax authorities for the first time, and this would be repeated every year.
Furthermore, upon the filing of prima facie evidence, Switzerland has been actively providing information about the accounts of Indians accused of financial malfeasance. Hundreds of cases have so far involved this type of information exchange. Customer deposits in Swiss banks totaled approximately CHF 2 trillion in 2020, with over CHF 600 billion in international deposits.
The UK led the charts with CHF 377 billion in foreign client funds in Swiss banks, followed by the US (CHF 152 billion) in second place — the only two nations with 100-billion-plus customer funds. West Indies, France, Hong Kong, Germany, Singapore, Luxembourg, Cayman Islands, and Bahamas rounded out the top ten. New Zealand, Norway, Sweden, Denmark, Hungary, Mauritius, Pakistan, Bangladesh, and Sri Lanka were all ranked ahead of India at 51st place.
India was ranked third among the BRICS countries, after China and Russia but ahead of South Africa and Brazil. Netherlands, UAE, Japan, Australia, Israel, Ireland, Turkey, Mexico, Austria, Greece, Egypt, Canada, Qatar, Belgium, Bermuda, Kuwait, South Korea, Portugal, Jordan, Thailand, Seychelles, Argentina, Indonesia, Malaysia, and Gibraltar were all ranked higher than India.
The United States and the United Kingdom were among the nations where Swiss banks reported a decrease in amounts due to clients in 2020, while money parked by individuals and businesses from Bangladesh also decreased. In the case of Pakistan, however, the amount nearly doubled to CHF 642 million. The subject of supposed black money in Swiss banks has been a political hot potato in both countries, just as it has been in India.
As per the SNB, at the end of 2020 there were 243 banks in Switzerland.