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Indian money parked in Swiss banks hits all time low

Money parked by Indians in Swiss banks has been reducing drastically, thanks to the Modi government’s relentless efforts to curb black money.

The latest data published by Swiss National Bank (SNB) shows that the total funds held by Indians with Swiss banks in 2016 stood at a record low of 676 million CHF (Swiss francs), which was about Rs 4,500 crore. This amount is in form of customer deposits, money owed to Indians through other banks, and other liabilities.

In 2015, the total funds held by Indians with Swiss banks stood at CHF 1,206.71 million. In the year 2014, the total funds held by Indians with Swiss banks stood at CHF 1,814 million. This is the third straight year of substantial decline of funds held by Indians with Swiss banks.

The funds held by Indians with Swiss banks stood at a record high of CHF 6.5 billion (Rs 23,000 crore) at 2006-end. In about a decade it has come down to almost one-tenth.

The total fund held by Indians with Swiss banks in 2016 is the lowest ever since the Alpine nation began making the data public in 1987. Earlier the lowest figure was recorded at CHF 723 million in 1995.

Neighbouring Bangladesh though saw a rise of 20% in Swiss bank deposits compared to last year while Pakistan saw a marginal decline, though their deposits still are more than double of that of India.

Earlier this month, Switzerland had ratified automatic exchange of financial account information with India which would facilitate immediate sharing of details about suspected black money. Adopting the Automatic Exchange of Information (AEOI) – a global convention on tax matters – the Swiss Federal Council said the implementation is planned for 2018 and the first set of data would be exchanged in 2019.

The development came following hectic parleys between India and Switzerland for introduction of the AEOI on tax matters under the guidance of G-20, OECD (Organisation for Economic Co-operation and Development) and other global organisations.

After resuming office in 2014, the Modi government has taken various steps to curb black money. The government has constituted a Special Investigation Team (SIT) to combat the back black money menace in both overseas and domestic domain. The government has enacted a black money law, amended the anti-money laundering Act and given compliance windows for people to declare their hidden assets.

According to reports, the Income Tax Department detected over Rs 13,000 crore black money post investigations on global leaks about Indians stashing funds abroad and launched prosecution against hundreds of entities, including those with accounts in Geneva branch of HSBC.

The tax department had detected Rs 8,186 crore of undisclosed income against those whose names figured in the HSBC list. Of the total 628 cases under this list, the I-T Department got “actionable” evidence in 415 cases, of which assessments have been completed in 398 cases.

The Enforcement Directorate (ED) has started taking action, including seizure of properties, of those named in the HSBC list under a new clause in the Foreign Exchange Management Act (FEMA).

Ayodhra Ram Mandir special coverage by OpIndia

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OpIndia Staff
OpIndia Staff
Staff reporter at OpIndia

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