Indians’ Black Money Increased in Swiss Banks? Centre Says No

Reports suggested that funds held by Indian individuals and firms in Swiss banks rose to Rs 20,700 crore in 2020.

Funds held by Indian individuals and firms in Swiss banks rose to Rs 20,700 crore, or 2.55 billion Swiss francs in 2020. Image used for representational purpose.

(Photo: iStock)

The Union Finance Ministry on Saturday, 19 June, said that increase in deposits of Indians in Swiss Banks could be on account of increase in business of Swiss bank branches located in India and raised Inter-bank transactions, rather than due to an increase in alleged black money held by Indians in Switzerland.

It, however, said that Swiss authorities have been requested to provide the relevant facts along with their view on possible reasons for increase or decrease in deposits so that facts could be presented in correct perspective.

This comes after news agency PTI reported that funds held by Indian individuals and firms in Swiss banks rose to Rs 20,700 crore, or 2.55 billion Swiss francs in 2020, a day earlier. This includes funds through India-based branches and other financial institutions.

Holdings via securities and similar instruments saw a sharp surge, but customer deposits fell, annual data from Switzerland’s central bank revealed on Thursday, 17 June.

This data reported by banks to the SNB does not indicate the amount of alleged black money held by Indians in Switzerland, and it does not include the funds held by Indians, NRIs, or others under names of third-country entities.

Finance Min’s Response

“Reports allude to the fact that the figures reported are official figures reported by banks to Swiss National Bank (SNB) and do not indicate the quantum of much debated alleged black money held by Indians in Switzerland. Further, these statistics do not include the money that Indians, NRIs or others might have in Swiss banks in the names of third-country entities,” the ministry statement said.

The statement added that the customer deposits have actually fallen from the end of 2019 in a Swiss Banks. The funds held through fiduciaries has also more than halved from end of 2019.

The biggest increase is in "Other amounts due from customers". These are in form of bonds, securities and various other financial instruments, the finance min statement said.

The ministry also ascribed various other reasons for increase in deposits and not possibly on account of the increase of deposits in the Swiss banks out of undeclared incomes of Indian residents.

It said that that increase in deposits may be on account if increase in deposits owing to the business of Swiss Bank branches located in India or Increase in Inter – bank transactions between Swiss and Indian Banks.

Sharp Surge in ‘Other Amounts Due to Customers’

This Rs 20,706 crore amount (CHF 2,554.7 million), which is the ‘total liabilities’ of Swiss banks, or the ‘amounts due to’ Indian clients at the end of 2020, includes:

• Over Rs. 4,000 crore (CHF 503.9 million) in customer deposits.
• Over Rs 3,100 crore (CHF 383 million) via other banks.
• Rs 16.5 crore (CHF 2 million) through fiduciaries / trusts.
• Nearly Rs 13,500 crore (CHF 1,664.8 million) in ‘other amounts due to customers’ as bonds, securities, and other financial instruments.

The data reveals that money held via other banks has seen a sharp surge from CHF 88 million at the end of 2019. On the other hand, customer account deposits have fallen from CHF 550 million at the end of 2019, and fiduciaries have more than halved from CHF 7.4 million, PTI reported.

The biggest rise can be seen in ‘other amounts due to customers’, which increased more than six-fold from CHF 253 million at the end of 2019, the report added.

Where India Stands Among Other Countries

Overall customer deposits in all Swiss banks rose to nearly CHF 2 trillion in 2020, including CHF 600 billion in foreign customer deposits, PTI reported.

With the UK topping the charts for foreign clients’ funds at CHF 377 billion, the USA followed with CHF 152 billion. West Indies, France, Hong Kong, Germany, Singapore, Luxembourg, Cayman Islands, and the Bahamas also featured in the top 10, the report added.

India stood 51st on this list, below China and Russia, but above South Africa and Brazil among the BRICS nations. India also placed ahead of countries like New Zealand, Norway, Sweden, Denmark, Hungary, Mauritius, Pakistan, Bangladesh, and Sri Lanka, PTI reported.

(With inputs from PTI and IANS.)