Swiss banks hold allure for Asians

FUNDS deposited by Indian individuals and firms in Swiss banks, including through India-based branches and other financial institutions, jumped to a 14-year-high of 3.83 billion Swiss francs (£3.22bn) in 2021, annual data from Switzerland’s central bank showed last Thursday (16).

It is the second consecutive year that there has been a rise in aggregate funds by Indian clients in Swiss banks.

Money held in Indian customers’ savings or deposit accounts rose to a seven-year high of about `48bn (£500.2 million), reversing a two-year declining trend.

The total amount of CHF 3,831.91m, described by the SNB as ‘total liabilities’ of Swiss banks or ‘amounts due to’ their Indian clients at the end of 2021 included CHF 602.03m in customer deposits (up from CHF 504m at 2020-end), CHF 1,225m held via other banks (up from CHF 383m), and CHF 3m through fiduciaries or trusts (up from CHF 2m).

These figures also do not include the money that Indian nationals or people of Indian origin may have in Swiss banks in the names of third-country entities. On the other hand, the ‘locational banking statistics’ of the Bank for International Settlement (BIS), which have been described in the past by Indian and Swiss authorities as a more reliable measure for deposits by Indian individuals in Swiss banks, showed a decline of 8.3 per cent during 2021 in such funds to $115.5m (£94m), after rising by nearly 39 per cent during 2020 to $125.9m (`932 crore).

While the UK topped the charts for foreign clients’ money in Swiss banks at CHF 379bn, it was followed by the US (CHF 168bn) at the second spot — the only two countries with 100-billion-plus client funds. India was placed at 44th place, ahead of Poland, South Korea, Sweden, Bahrain, Oman, New Zealand, Norway, Mauritius, Bangladesh, Pakistan, Hungary and Finland.

Among BRICS nations, India stood below Russia (15th place) and China (24th), but above South Africa and Brazil.

An automatic exchange of information in tax matters between Switzerland and India has been in force since 2018. Under this framework, detailed financial information on all Indian residents having accounts with Swiss financial institutions since 2018 was provided for the first time to Indian tax authorities in September 2019 and this is to be done every year.