Funds deposited by Indians and firms in Swiss banks through India-based branches and other financial institutions, holdings through securities and similar instruments have seen a sharp jump in 2020. It has now reached 2.55 billion Swiss francs (over Rs 20,700 crore). However, customer deposits have come down. This has emerged in the annual figures released by the central bank of Switzerland.
The total funds of Indian customers with Swiss banks have registered an increase from 899 million Swiss francs (Rs 6,625 crore) at the end of 2019. Whereas, this is in contrast to the declining trend of two years ago. This figure has reached the highest level in 13 years. The fund was at a record high of around 6.5 billion Swiss francs in 2006, after which it mostly declined, except for a few years, including 2011, 2013 and 2017, according to data from the Swiss National Bank (SNB).
The total amount of CHF 2,554.7 million (Rs 20,706 crore) described by SNB as ‘total liabilities’ or ‘dues’ of Swiss banks to their Indian customers at the end of 2020 includes CHF 503.9 million (over Rs 4,000 crore). In customer deposits, CHF 383 million (over Rs 3,100 crore), through other banks, CHF 2 million (Rs 16.5 crore) through fiduciaries or trusts and the highest component of CHF 1,664.8 million (approximately Rs 13,500 crore) ‘others as amounts. Deposits made by customers in the form of bonds, securities and various other financial instruments.
Whereas funds classified as ‘customer account deposits’ have actually decreased by CHF 550 million at the end of 2019 and those also through fiduciaries have more than doubled from CHF 7.4 million, held through other banks. Wealth has grown rapidly over this period from CHF 88 million. The biggest difference, however, has been the increase in ‘other amounts due to customers’ from India, which grew more than six times to CHF 253 million at the end of 2019.
These are official figures reported by banks to the SNB and do not indicate the quantum of the much talked about alleged black money held by Indians in Switzerland. These figures also do not include money that Indians, NRIs or others may have in Swiss banks in the name of third country entities.
According to SNB, its data for ‘total liabilities’ of Swiss banks towards Indian customers takes into account all types of funds held by Indian customers in Swiss banks, including deposits from individuals, banks and enterprises. This includes branches of Swiss banks in India as well as non-deposit liabilities.
On the other hand, the ‘local banking data’ of the Bank for International Settlement (BIS), which has in the past been described by Indian and Swiss authorities as a more reliable measure for deposits by Indians in Swiss banks, has increased. About 39 per cent in such funds is USD 125.9 million (Rs 932 crore) during 2020.
This figure takes deposits as well as loans from Indian non-bank customers of Swiss-dominated banks and increased by 7 per cent in 2019 after falling by 11 per cent in 2018 and 44 per cent in 2017. It exceeded US$2.3 billion (over Rs 9,000 crore) at the end of 2007.
The Swiss authorities have always maintained that the assets of Indian residents in Switzerland cannot be treated as ‘black money’ and actively support India in the fight against tax fraud and evasion. Automatic exchange of information in tax matters between Switzerland and India has been in place since 2018.