Indians’ funds in Swiss banks rise to over Rs 20,000 crore; customer deposits down for second year

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Swiss authorities have all the time maintained that property held by Indian residents in Switzerland can’t be thought-about as ‘black cash’. (Consultant picture)

NEW DELHI/ZURICH: Funds parked by Indian people and companies in Swiss banks, together with by way of India-based branches and different monetary establishments, jumped to 2.55 billion Swiss francs (over Rs 20,700 crore) in 2020 on a pointy surge in holdings through securities and related devices, although buyer deposits fell, annual knowledge from Switzerland’s central financial institution confirmed on Thursday.
The rise in combination funds of Indian shoppers with Swiss banks, from 899 million Swiss francs (Rs 6,625 crore) on the finish of 2019, reverses a two-year declining pattern and has taken the determine to the very best stage in 13 years.
It stood at a document excessive of almost 6.5 billion Swiss francs in 2006, after which it has been totally on a downward path, apart from a number of years together with in 2011, 2013 and 2017, as per the Swiss Nationwide Financial institution (SNB) knowledge.
The whole quantity of CHF 2,554.7 million (Rs 20,706 crore), described by the SNB as ‘whole liabilities’ of Swiss banks or ‘quantities resulting from’ their Indian shoppers on the finish of 2020, included CHF 503.9 million (over Rs 4,000 crore) in buyer deposits, CHF 383 million (over Rs 3,100 crore) held through different banks, CHF 2 million (Rs 16.5 crore) by way of fiduciaries or trusts and the very best part of CHF 1,664.8 million (almost Rs 13,500 crore) as ‘different quantities resulting from clients’ in type of bonds, securities and numerous different monetary devices.
Whereas the funds categorised as ‘buyer account deposits’ have truly declined from CHF 550 million on the finish of 2019 and people by way of fiduciaries additionally greater than halved from CHF 7.4 million, the cash held through different banks rose sharply from CHF 88 million on this interval.
Nevertheless, the most important distinction has been a surge in ‘different quantities resulting from clients’ from India, which rose over six instances from CHF 253 million at 2019-end.
All 4 elements had declined throughout 2019.
These are official figures reported by banks to the SNB and don’t point out the quantum of the much-debated alleged black cash held by Indians in Switzerland.
These figures additionally don’t embody the cash that Indians, NRIs or others may need in Swiss banks in names of third-country entities.
In accordance with the SNB, its knowledge for ‘whole liabilities’ of Swiss banks in direction of Indian shoppers takes into consideration all kinds of funds of Indian clients at Swiss banks, together with deposits from people, banks and enterprises. This consists of knowledge for branches of Swiss banks in India, as additionally non-deposit liabilities.
However, the ‘locational banking statistics’ of the Financial institution for Worldwide Settlement (BIS), which have been described previously by Indian and Swiss authorities as a extra dependable measure for deposits by Indian people in Swiss banks, present a rise of almost 39 per cent throughout 2020 in such funds to USD 125.9 million (Rs 932 crore).
This determine takes into consideration deposits in addition to loans of Indian non-bank shoppers of Swiss-domiciled banks and had proven a rise of seven per cent in 2019, after declining by 11 per cent in 2018 and by 44 per cent in 2017.
It peaked at over $2.3 billion (over Rs 9,000 crore) on the finish of 2007.
Swiss authorities have all the time maintained that property held by Indian residents in Switzerland can’t be thought-about as ‘black cash’ and so they actively assist India in its struggle towards tax fraud and evasion.
An computerized trade of knowledge in tax issues between Switzerland and India has been in power since 2018. Underneath this framework, detailed monetary info on all Indian residents having accounts with Swiss monetary establishments since 2018 was offered for the primary time to Indian tax authorities in September 2019 and that is to be adopted yearly.
Along with this, Switzerland has been actively sharing particulars about accounts of Indians suspected to have indulged in monetary wrongdoings after submission of prima facie proof. Such trade of knowledge has taken place in tons of of instances thus far.
General, buyer deposits in all Swiss banks rose in 2020 to almost CHF 2 trillion, which included over CHF 600 billion of overseas buyer deposits.
Whereas the UK topped the charts for overseas shoppers’ cash in Swiss banks at CHF 377 billion, it was adopted by the US (CHF 152 billion) on the second spot — the one two international locations with 100-billion-plus consumer funds.
Others within the high 10 had been West Indies, France, Hong Kong, Germany, Singapore, Luxembourg, Cayman Islands and Bahamas.
India was positioned at 51st place, forward of nations like New Zealand, Norway, Sweden, Denmark, Hungary, Mauritius, Pakistan, Bangladesh and Sri Lanka.
Amongst BRICS nations, India stood under China and Russia, however above South Africa and Brazil.
Others positioned above India included Netherlands, UAE, Japan, Australia, Italy, Saudi Arabia, Israel, Eire, Turkey, Mexico, Austria, Greece, Egypt, Canada, Qatar, Belgium, Bermuda, Kuwait, South Korea, Portugal, Jordan, Thailand, Seychelles, Argentina, Indonesia, Malaysia and Gibraltar.
The international locations for which Swiss banks reported a decline in quantities resulting from shoppers included the US and UK, whereas the cash parked by people and enterprises from Bangladesh additionally declined throughout 2020.
Nevertheless, the quantity nearly doubled within the case of Pakistan to over CHF 642 million.
Similar to India, the problem of alleged black cash in Swiss banks has been a political scorching potato within the two neighbouring international locations as effectively.
As per the SNB, there have been 243 banks in Switzerland on the finish of 2020.

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