Funds deposited by Indian individuals and businesses in Swiss banks, including through branches and other Indian-based financial institutions, reached a 14-year high of 3.83 billion Swiss francs (more 30,500 crore rupees) in 2021 thanks to a sharp increase in holdings via securities and similar instruments while customer deposits also increased, annual data from the Swiss central bank showed on Thursday.
The increase in aggregate funds from Indian customers with Swiss banks, of 2.55 billion Swiss francs (Rs 20,700 crore) at the end of 2020, marks the second consecutive year of increase.
Additionally, money held in savings or deposit accounts of Indian customers hit a seven-year high of around Rs 4,800 crore, reversing a two-year downward trend.
The total amount of 3,831.91 million francs, described by the SNB as the “total liabilities” of Swiss banks or the “amounts due to” their Indian customers at the end of 2021, included 602.03 million francs in deposits. of customers (compared to CHF 504 million in 2020 – end), CHF 1,225 million held via other banks (instead of CHF 383 million) and CHF 3 million via fiduciaries or trusts (instead of 2 million CHF).
The highest component of CHF 2,002 million (compared to CHF 1,665 million previously) consisted of “other amounts due from customers” in the form of bonds, securities and various other financial instruments.
The total amount stood at an all-time high of nearly 6.5 billion Swiss francs in 2006, after which it was mostly on a downward trajectory except for a few years, including 2011, 2013, 2017 , 2020 and now in 2021, according to data from the Swiss National Bank (SNB).
While all four components had declined in 2019, the year 2020 saw a significant drop in customer deposits, while there was an increase across all categories in 2021.
These are official figures reported by the banks to the SNB and do not indicate the amount of the highly controversial alleged black currency held by Indians in Switzerland. These figures also do not include money that Indians, NRIs or others may have in Swiss banks on behalf of third country entities.
According to the SNB, its data on Swiss banks’ “total exposure” to Indian customers takes into account all types of Indian customer funds with Swiss banks, including retail, bank and corporate deposits. This includes data from branches of Swiss banks in India, as well as liabilities other than deposits.
On the other hand, the Bank for International Settlements (BIS) “Location Banking Statistics”, which have been described in the past by Indian and Swiss authorities as a more reliable measure of Indian retail deposits in Swiss banks, showed an 8.3% decline in 2021 in these funds to $115.5 million (Rs 927 crore at current exchange rates), after rising nearly 39% in 2020 to $125.9 million. dollars (932 crore rupees).
This figure takes into account deposits as well as loans from Indian non-bank customers of banks domiciled in Switzerland and had shown an increase of 7% in 2019, after a drop of 11% in 2018 and 44% in 2017. It peaked to over $2.3 billion (over Rs 9,000 crore) by the end of 2007.
The Swiss authorities have always maintained that assets held by Indian residents in Switzerland cannot be considered as “black money” and they actively support India in its fight against tax evasion and evasion.
An automatic exchange of information in tax matters between Switzerland and India has been in force since 2018. In this context, detailed financial information on all Indian residents who have accounts with Swiss financial institutions since 2018 has been provided for the first time to the Indian tax authorities in September. 2019 and it must be done every year.
In addition to this, Switzerland has actively shared details of accounts of Indians suspected of engaging in financial wrongdoing after prima facie evidence was presented. Such exchange of information has taken place in hundreds of cases so far.
Overall, customer deposits across the entire Swiss banking spectrum, consisting of 239 banks, increased in 2021 to almost CHF 2.25 trillion. Aggregate funds from foreign clients, including institutions, reached almost 1.5 trillion Swiss francs (Rs 118 lakh crore).
In terms of assets (or funds owed by customers), Indian customers represented 4.68 billion francs at the end of 2021, up almost 10%. This included contributions from Indian customers worth around 323 million francs after rising 25 percent during the year.
While the UK topped the rankings for foreign customers’ money in Swiss banks with CHF 379 billion, it was followed by the US (CHF 168 billion) in second place – the only two countries with more than 100 billion customer funds.
Others in the top 10 were the West Indies, Germany, France, Singapore, Hong Kong, Luxembourg, Bahamas, Netherlands, Cayman Islands and Cyprus.
India was placed in 44th place, ahead of countries like Poland, South Korea, Sweden, Bahrain, Oman, New Zealand, Norway, Mauritius, Bangladesh, Pakistan, Hungary and Finland.
Among the BRICS countries, India is behind Russia (15th place) and China (24th), but ahead of South Africa and Brazil.
Others placed above India included the United Arab Emirates, Australia, Japan, Italy, Spain, Panama, Saudi Arabia, Mexico, Israel, Taiwan, Lebanon, Turkey, Austria, Ireland, Greece, Bermuda, Marshall Islands, Liberia, Belgium, Malta, Canada, Portugal, Qatar, Egypt, Thailand, Kuwait and Jordan.
Pakistan saw its citizens’ and businesses’ funds increase to 712 million francs, while those in Bangladesh reached 872 million francs.
Just like in India, the issue of allegedly black money in Swiss banks has also been a political hot potato in the two neighboring countries.
After the annual release of the data last year, the Indian government had asked the Swiss authorities for details on the relevant facts as well as their views on the possible reasons for the changes in funds parked by individuals and entities in 2020.
In its statement, the Ministry of Finance had said that the figures “do not indicate the amount of highly controversial alleged black money held by Indians in Switzerland. Moreover, these statistics do not include the money that Indians , NRIs or others may have in Swiss banks on behalf of third country entities.”
He had also listed the reasons that could have led to the increase in deposits, including the increase in commercial transactions of Indian companies, the increase in deposits due to the activity of Swiss bank branches located in India and the increase in interbank transactions between the Swiss and the Indians. banks.
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