Indians have ‘few deposits’ in Switzerland, more in Singapore and Hong Kong: Swiss banks

By the end of 2015, a total of 1.2 billion swiss franc (about Rs 8,392 crore) was stored by Indians in Swiss banks. The amount is lowest-ever since 1997.

 

 

Swiss banks, considered to be the most favoured banking destination of those holding unaccounted wealth, claim there are ‘few deposits’ from Indian in the Alpine nation. The Geneva-based Association of Swiss Private Banks said Indians prefer other global hubs based in Asia, including Singapore and Hong Kong, for stashing their wealth abroad.

According to the association’s manager Jan Langlo, Indians find it more logical to store wealth in a proximite global hub, rather than opening accounts in the Swiss banks. “There are also rather few deposits of Indian residents in Switzerland, as opposed to Singapore or Hong Kong for instance. It is simply more practical for them to open an account in an Asian financial centre than in Switzerland,” Langlo told PTI.

The statement of Swiss bankers’ grouping comes a day after Switzerland ratified itself to the global framework for automatic exchange of tax information (AEOI), with over 40 jurisdictions including India. As per the agreement, Swiss banks would share information of all Indian account holders with New Delhi, on the condition of confidentiality.

The AEOI framework is expected to be implemented by 2019. According to Langlo, the bilateral agreement with India could be terminated if the clause of maintaining confidentiality is not upheld. However, the association says there is no particular concern over India, where “rule of law seems to properly upheld”.

“We would like to ensure that bank data that will be transmitted in 2019 is used for tax verification purposes only… if data received from another country has been misused in a jurisdiction, Switzerland is unlikely to send data to that jurisdiction,” Langlo added.

The money stashed by Indians in Swiss bank continues to fall rapidly. Following the regime change in New Delhi in 2014, the figures came down its its lowest. By the end of 2015, a record low of 1.2 billion swiss franc (about Rs 8,392 crore) was stored by Indians in Swiss banks. The amount is lowest-ever since 1997.

Deposits from India in Switzerland peaked in 2006, when CHF 6.5 billion was stashed in Swiss banks. The figures came down subsequently, with a slight peak of 12 and 42 per cent recorded in 2011 and 2013 respectively.

Ahead of the 2014 general elections in India, ‘black money’ turned into a crucial poll issue, with the then frontrunner Narendra Modi promising to retrieve the unaccounted wealth stashed abroad. The erstwhile government led by Congress was accused of being hand-in-glove with the tax evaders.