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Swiss National Bank report Indian money in Swiss banks at a record low

Bringing back "black money" to India was one of the main election campaign promises of Prime Minister Narendra Modi (left). 

(Keystone)

Figures released by the Swiss National Bank (SNB) show that Indian funds in Swiss banks dropped to CHF377 million ($393 million or almost INR25.5 billion) in 2016, the lowest in 20 years. 

On Thursday, SNB published the figures for 2016 as part of its annual Banks in Switzerland Reportexternal link.  At CHF376.97 million, the share of Indian money in Swiss banks (Amounts due in respect of customer deposits) continues to fall and is the lowest in 20 years. The steepest decline was in 2015 with only CHF425 million in deposits compared to CHF1.37 billion in 2014. 

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For a second time in a row Pakistan has more money in Swiss banks than India with CHF897.5 million deposited in 2016. One possible reason is that Pakistan, unlike India, does not have a banking information exchange deal with Switzerland.

New reality

In November 2016, India became one of a select groupexternal link of countries that will benefit from an annual automatic exchange of banking information with Switzerland in the next couple of years. This will ensure that financial information on bank accounts held by Indian citizens in Switzerland and vice-versa will be shared annually It is expected that both countries will begin collecting banking data from 2018 and exchange information on annual basis from 2019. 

To prevent losing its status as a global financial hub, Switzerland signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in 2014. The Swiss parliament approved the deal in 2015, the treaty was ratified in 2016 and came into effect on January 1, 2017. 

India has been lobbying hard to be a part of this international initiative to crack down of tax avoidance in a bid to prevent its citizens from stashing undeclared funds in Swiss banks. It finally managed to convince the Swiss authorities that it will respect Switzerland’s tradition of banking secrecy by respecting confidentiality of account holders and using the data for tax purposes only.

swissinfo.ch

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