Indians’ money in Swiss banks fell by 6% in 2019
Marks second consecutive year of decline in aggregate funds of Indian clients
Funds parked by Indian individuals and enterprises in Swiss banks, including through India-based branches, fell nearly 6 per cent in 2019 to 899 million Swiss francs, or CHF (~6,625 crore), the annual data from Switzerland’s central bank showed on Thursday.
This marks the second consecutive year of decline in aggregate funds of Indian clients with all Swiss banks, taking the figure to the third lowest level in more than three decades since 1987 when the Swiss National Bank (SNB) began compiling the data.
The total amount of CHF 899.46 million, described by the SNB as aggregate ‘liabilities’ of Swiss banks or ‘amounts due to’ their Indian clients at the end of 2019, included CHF 550 million (over ~4,000 crore) of customer deposits, CHF 88 million (~650 crore) held via other banks, CHF 7.4 million (~50 crore) through fiduciaries or trusts; and CHF 254 million (~1,900 crore) as ‘other amounts due to customers’ in the form of securities and various financial instruments. All the four components declined during 2019.
These are official figures reported by banks to the SNB and do not indicate the quantum of the much- debated alleged black money held by Indians in Switzerland. These figures also do not include the money that Indians, NRIS or others might have in Swiss banks in the names of thirdcountry entities.
According to the SNB, its data for ‘total liabilities’ of Swiss banks towards Indian clients takes into account all types of funds of Indian customers at Swiss banks, including deposits from individuals, banks, and enterprises. This includes the data for branches of Swiss banks in India, as also non-deposit liabilities.
Indian and Swiss authorities have earlier said that a more reliable measure for deposits by Indian individuals in Swiss banks is given by the ‘locational banking statistics’ of the Bank for International Settlement (BIS), which showed marginal increase of 0.07 per cent in 2019 to $90.6 million (nearly ~646 crore).
This figure takes into account deposits as well as loans of Indian non-bank clients of Swiss-domiciled banks and had shown a decline of 11 per cent in 2018 and of 44 per cent in 2017. It peaked at over $2.3 billion (over ~9,000 crore) at the end of 2007.
Swiss authorities have always maintained that assets held by Indian residents in Switzerland cannot be considered ‘black money’ and they actively support India in its fight against tax fraud and evasion.