According to yearly figures released today by Switzerland’s central bank, funds held by Indian individuals and businesses in Swiss banks, including through local branches and other financial institutions, experienced a steep decline of 70% in 2023, reaching a four-year low of 1.04 billion Swiss Francs (Rs 9,771 crore).
After reaching a 14-year high of CHF 3.83 billion in 2021, the total amount of money that Indian clients had with Swiss banks decreased for the second year in a row. This decline was primarily caused by a substantial decline in the amount of money that clients kept in bonds, securities, and other financial instruments.
Additionally, the statistics indicated a considerable fall in the amount kept in client deposit accounts and cash maintained through other bank branches in India.
These are official numbers provided by banks to the Swiss National Bank (SNB); they do not represent the amount of the much-discussed ‘black money’ that Indians in Switzerland are allegedly holding. Additionally, the money that Indians, NRIs, or other individuals may have in Swiss banks under the names of third-country businesses is not included in these figures.
The SNB classified the sum of CHF 1,039.8 million as the “total liabilities” of Swiss banks or “amounts due to” their Indian clients at the end of 2023. This included CHF 310 million in customer deposits (which had decreased from CHF 394 million at the end of 2022), CHF 427 million held by other banks (which had decreased from CHF 1,110 million), CHF 10 million through fiduciaries or trusts (which had decreased from CHF 24 million), and CHF 302 million as “other amounts due to customers in form of bonds, securities and various other financial instruments” (which had decreased from CHF 1,896 million).
According to SNB data, the total amount reached a record high of around 6.5 billion Swiss francs in 2006. Since then, it has primarily been declining, with a few exceptions, including 2011, 2013, 2017, 2020, and 2021.
While customer deposits decreased significantly in 2020, all four components showed a reduction in 2019, and in 2021, all categories witnessed an increase. Only the fiduciaries segment experienced growth in 2022.
The SNB claims that all Indian customers’ deposits with Swiss banks, including those from individuals, banks, and businesses, are included in its data on the “total liabilities” of Swiss banks to their clients. Data for Swiss bank branches in India is included in this.
However, the Bank for International Settlement’s “locational banking statistics,” which have previously been regarded by Swiss and Indian authorities as a more accurate indicator of the amount of money that Indian citizens deposit in Swiss banks, revealed a nearly 25% decrease in these funds in 2023 to USD 70.6 million (Rs 663 crore).
After increasing by almost 39% in 2020, it had decreased by 18% in 2022 and by more than 8% in 2021.
This number, which includes deposits and loans from Indian non-bank customers of Swiss-domiciled banks, increased by 7% in 2019 following declines of 11% in 2018 and 44% in 2017.
It reached a peak at the end of 2007 of more than USD 2.3 billion (more than ? 9,000 crore).
Indian residents’ assets in Switzerland have never been deemed “black money,” according to Swiss authorities, who also actively assist India in combating tax evasion and fraud.
Since 2018, Switzerland and India have begun exchanging automated tax-related information. According to this structure, Indian tax authorities received comprehensive financial data on all Indian citizens who have accounts with Swiss financial institutions since 2018 for the first time in September 2019 and this is being done annually since then.
Furthermore, following the submission of prima facie evidence, Switzerland has been actively disclosing information regarding accounts of Indians who are suspected of engaging in financial misconduct. This kind of information sharing has occurred in hundreds of cases thus far.
From CHF 1.15 trillion at the end of 2022 to CHF 983 billion (more than ? 92 lakh crore) in 2023, the total amount of funds held by foreign clients, including institutions, decreased.
Indian clients made up CHF 1.46 million in assets at the end of 2023, a 63% decrease from the year before and the lowest amount in more than 20 years.
This comprised approximately CHF 188 million in dues from Indian clients, which increased from CHF 164 million at the end of 2022.
With CHF 254 billion, the UK led the list of countries with foreign clients’ money in Swiss banks. The US came in second with CHF 71 billion, while France came in third with CHF 64 billion.
The West Indies, Germany, Hong Kong, Singapore, Luxembourg, and Guernsey ranked among the next ten places, after these three.
By the end of 2022, India had dropped from 46th to 67th rank.
Bangladesh had a dramatic decline from CHF 55 million to CHF 18 million, while Pakistan also suffered a decline, down to CHF 286 million (from CHF 388 million).
Similar to India, the topic of purported black money in Swiss banks has been a contentious political issue in the two neighboring nations.
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