In COVID times, Indians’ funds in Swiss banks rise to over ₹20k crore

The economic growth of the country has contracted to 7.3% in 2020-21 and many people have either lost their jobs or have seen cuts in salary. But all this has not prevented Indians and Indian firms from parking their money in Swiss banks.

As per data released by Switzerland Central Bank, the total deposits in 2020-21 by Indians have increased to 2.55 billion Swiss francs (₹20,706 crore) from 899 million Swiss francs (₹6,625 crore) in 2019. Most of these funds are parked in holdings via securities and similar instruments, as per the annual data.

The increase in aggregate funds of Indian clients with Swiss banks is a new high in the last 13 years and has happened in a pandemic year. The increase also reverses a two-year declining trend.

Also read: Indians’ money in Swiss banks fell by 6% in 2019; 3rd lowest in 3 decades

The Swiss National Bank data shows that the record high investments of 6.5 billion Swiss francs was seen in 2006, after which it has been mostly declining, except in 2011, 2013 and 2017 when it rose.

The total amount of ₹20,706 crore is described by the SNB as total liabilities of Swiss banks. Out of the total amount, Swiss francs 503.9 million (over ₹4,000 crore) is in the form of customer deposits, 383 million (over ₹3,100 crore) held via other banks, 2 million (₹16.5 crore) through fiduciaries or trusts and the highest component of 1,664.8 million (nearly ₹13,500 crore) as bonds, securities and various other financial instruments.

Also read: First tranche of Swiss bank data gives details to identify hidden wealth

These are official figures reported by banks to the SNB and do not reveal the quantum of 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 names of third-country entities.

Swiss authorities have always maintained that assets held by Indian residents in Switzerland cannot be considered as black money and they actively support India in its fight against tax fraud and evasion. 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 followed every year.

In addition to this, Switzerland has been actively sharing details about accounts of Indians suspected to have indulged in financial wrongdoings after the submission of prima facie evidence. Such exchange of information has taken place in hundreds of cases so far.

Overall, customer deposits in all Swiss banks rose in 2020 to nearly CHF 2 trillion, which included over CHF 600 billion of foreign customer deposits.

While the UK topped the charts for foreign clients’ money in Swiss banks at CHF 377 billion, it was followed by the US (CHF 152 billion) at the second spot — the only two countries with 100-billion-plus client funds.