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Updated: April 5, 2012 14:01 IST

Indians have stashed over $500 billion in banks abroad: CBI

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Largest depositors in Swiss Banks are also reported to be Indians, says CBI Director A.P. Singh.
Largest depositors in Swiss Banks are also reported to be Indians, says CBI Director A.P. Singh.

Indians are the largest depositors in banks abroad with an estimated $500 billion (nearly Rs 24.5 lakh crore) of illegal money stashed by them in tax havens, the CBI Director said on Monday.

India, in particular, has suffered from the flow of illegal funds to tax havens such as Mauritius, Switzerland, Lichtenstein, and British Virgin islands.

“It is estimated that around 500 billion dollars of illegal money belonging to Indians is deposited in tax havens abroad. Largest depositors in Swiss Banks are also reported to be Indians,” CBI Director A.P. Singh said speaking at the inauguration of first interpol global programme on anti-corruption and asset recovery.

He said getting information about such illegal transactions is a time taking process as investigators have to peel each layer by sending judicial requests to the country where such deposits have been made.

“Fifty three per cent of the countries said to be least corrupt by the Transparency International Index are offshore tax havens, where most of the corrupt money goes. The tax havens include New Zealand which is ranked as the least corrupt country, Singapore ranked number five and Switzerland number seven,” Mr. Singh said.

He said there is a lack of political will in the leading tax haven states to part with the information because they are aware of the extent to which their economies have become “geared to this flow of illegal capitals from the poorer countries.”

The CBI Director said tracing, freezing, confiscation and repatriation of stolen assets is a legal challenge, a complex process which requires expertise and political will.

“Managing the asset recovery investigation is complex, time consuming, costly and most importantly requires expertise and political will. There are many obstacles to asset recovery. Not only is it a specialised legal process filled with delays and uncertainty, but there are also language barriers and a lack of trust when working with other countries,” Mr. Singh said.

He said global financial markets allow money to travel faster and further making tracking the money trail in such cases even more difficult which necessitates the organisation of such global training programs as they enhance the knowledge of investigators in tracking assets created out of corrupt and criminal acts.

Mr. Singh said criminals are using the territorial issues of investigating agencies to their advantage by spreading their crimes to at least two countries and investing in a third.

“In some of the recent important cases being investigated by the CBI such as 2G, CWG and Madhu Koda, we find that money is taken to Dubai/Singapore/Mauritius from where it goes to Switzerland and other such tax havens.

“For criminals all it involves is setting up of a few shell companies and then making layered transfers from account to another in a matter of hours as there are no boundaries in banking transactions,” he said.

He said the World Bank estimates the cross border flow of money from criminal activities and tax evasion is around 1.5 trillion US dollars of which 40 billion US dollars is bribe paid to government servants in developing countries.

Mr. Singh quoted the report to say that only five billion US dollars of this money has been repatriated during 15 years.

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There are many naive perceptions around this issue, as if this money was looted from a bank or a safehouse, put in a boat and taken to another country. What is the primary route for making illegal money? Bribery! Tax evasion is another of course, but you can only "evade" tax on income that is primarily legal. Bribery, on the other hand, is much more simple, and if a foreign company pays an Indian minister $5 million in bribe to get a project cleared, this $5 million never comes to India. So, how is this Indian money? A lot of Indians, particularly politicians know how to keep their foreign "assets" invisible to the Indian government, because after all it is the system they themselves oversee! If I am paid $500,000 by a foreign magazine, for example, for writing a great article that is never published in India, and I choose to receive payment into my offshore account, and simply do not declare this, how is the government ever going to come to know I made this money? Not simple.

from:  B S Kumar
Posted on: Apr 30, 2012 at 18:05 IST

According to Figures of CBI is not Correct,India have loss nearly $2000 billion money According to wikileaks report.I think even CBI also corrupted, This is Not Good for Country.

from:  MahendraGowd
Posted on: Feb 16, 2012 at 19:56 IST

Better late than never, the CBI director has come out with some estimate of illegal money stashed by Indians in tax havens. According to him, around 500 billion dollars (nearly Rs 24.5 lakh crore) of illegal money belonging to Indians is deposited abroad and that largest depositors in Swiss Banks are also reported to be Indians. As far as India is concerned, it is a huge sum of money, which, if brought back to the county and invested, could solve many of the ills facing the country. According to a recent report (November 2010) by Global Financial Integrity (GFI), The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008, India has lost around Rs.9.7 lakh crore ($ 323 billion) in illegal capital flight between 1948 and 2008.17 Financial Integrity (GFI), estimates that tax evasion, crime, and corruption have removed gross illicit assets from India worth US $462 billion. The report also finds that the faster rates of economic growth since economic reform started in 1991 led to a deterioration of income distribution which led to more illicit flows from the country. Moreover, the report finds that the poor state of governance is reflected in a growing underground economy which in turn has fueled more transfers of illicit capital from India. This analysis is cast in terms of a pre- and a post-reform period spanning a total of 61 years since independence. This report puts into stark terms the financial cost of tax evasion, corruption, and other illicit financial practices. It also shows that these illicit outflows contribute to stagnating levels of poverty and an ever widening gap between India’s rich and poor.

from:  Dr.C.Murukadas
Posted on: Feb 15, 2012 at 00:47 IST

I really appreciate the statement of CBI regarding the stashing of 500
billion in Swiss banks.At least there is some headway.We need strong
commitment and sincere efforts on the part of the bring the money back and we should learn a few lessons as American President Barack Obama has taken steps with the Illegal American money stashed abroad to bring it back some time ago.

from:  syam
Posted on: Feb 14, 2012 at 14:26 IST

''Even in the case of famous 2G scam we are not able to get the quantum of corruption from CBI,accountant generals and the government departments.The indications are zero to 1.65 lakhs crores.CBI could not even say who are involved let alone reports of that. When the director talks about 24.5 lakhs crores in foreign banks without getting any information from those countries,we could as well ignore them instead of planning to recover anddistribute that among Indian poor.
14 th feb''

from:  T.S.Gopalakrishnan
Posted on: Feb 14, 2012 at 10:12 IST

Why should they do that except that it suggests lack of confidence in the countries capacity and income generation.The country should modernise very fast and make it attractive for people to spend time here with fast, clean and efficient transportation.Good hospital services and plenty of opportunity for the new generation.Subterfuge is not wanted but hard work and rewards for hard work.Derecognition of western education as irrelevant to Indian milieu is a must to discourage the craze for foreign degrees.The returnee may be asked to do five years national service at starting Indian Wages.There should be Sufficient investment opportunity and retention of savings.When heavy investments are required then automatically the flow of money will reverse to fill the vacuum.

from:  Prof.Paul.V.John
Posted on: Feb 14, 2012 at 09:48 IST

It is good to see so many concerned comments about this article but are we ready to forego or give up our bribe giving mentality.unless Indian mind set is not changed the corruption is not go away so easily.becuase it is in our blood to give bribe even in going to temple for Darshan or meeting a India to be saved we should change ourselves first.

from:  SIRAJ
Posted on: Feb 14, 2012 at 07:09 IST

''Even in the case of famous 2G scam we are not able to get the quantum of corruption from CBI,accountant generals and the government departments.The indications are zero to 1.65 lakhs crores.CBI could not even say who are involved let alone reports of that. When the director talks about 24.5 lakhs crores in foreign banks without getting any information from those countries,we could as well ignore them instead planning to distribute that among Indian poor.

from:  T.S.Gopalakrishnan
Posted on: Feb 14, 2012 at 06:45 IST

Huge numbers and all that ill gotten wealth belongs to faceless Indians. Wow! If the CBI can quantify the amount and the destination where the money is parked, what is stopping them to identyfying the culprits and bringing them to book. Non co-operation of foreign governments to be expected. Has there been a single arrest on this issue by CBI? I don't think so. Mr Singh instead of throwing figures and hiding behind the cloak of Governmental inactivity, raise to the occassion and do something.

from:  mani sandilya
Posted on: Feb 14, 2012 at 06:25 IST

Flow of money in one particular direction is easy along a single track,but when it comes to recovery it involves so much resistance,making it impossible.The sufferers are the middle and lower classes,unable to bear the burden of price rise and salary deficit.We as a unit are supposed to work against such injustice including the politicians.When our money goes elsewhere they gladly accept but to return they pose rules.It is high time the whole country takes up an iron hand to bring back our money and glory.

from:  thirumangai
Posted on: Feb 14, 2012 at 00:37 IST

This is a staggering amount considering the poverty of the masses. Plundering India, has been a historical process going on for centuries.
Now Corporates and politicians are responsible for this massive loot of people's monies. These are in the hands of foreign banks. We will go on discussing this endlessly-- about treaties,procedures, tax laws and over seeing bodies, their limitations etc. and host of other things. In the meanwhile, these modern thugs will continue to evade all action against them. In the dismal situation, the SC is the only hope of the common man.

from:  G.Naryanaswamy
Posted on: Feb 14, 2012 at 00:17 IST

It is not as if we don't know who owns these accounts. Just google for "Rudolf Elmer" - he offered a CD to Indian govt. a long time ago with
names but the GOI never made it public or took action (according to him).

from:  Karthik
Posted on: Feb 13, 2012 at 21:46 IST

Unless the politicians are not punished for their corrupt activities and for sheltering the black marketers/boot leggers and anti-nationals our Country will remain poorer and the dream for be-coming developed nation will remain as a dream.

from:  V.Shanmuganathan
Posted on: Feb 13, 2012 at 20:15 IST

We should create lucrative investment offers/opportunities in india so that the investors can divert such fund on their own, for the development of our nation! Give them one time offer with deadline.

from:  Gnanam
Posted on: Feb 13, 2012 at 18:36 IST

As our Honorable Finance minister explained in the parliament the other day in a debate with opposition - Let us unravel this black money story and get it back into our system really SLOWLY, so that the depositors will NOT be alerted. ALL BIG JOKERS HAND IN HAND.

from:  Subramanian
Posted on: Feb 13, 2012 at 18:24 IST

If 2.5% of the amount is distributed among the poor the poverty in India would have been reduced by 12.5 billion dollars yearly.

from:  Simran
Posted on: Feb 13, 2012 at 18:24 IST

Tax-haven countries might not want these illegal money go back to
their respective countries as that may affect their economy. And their
laws are also framed as such to acquire all sorts of wealth
(legitimate or ill-gotten ones) from anywhere but to say a big NO to
return them.
Same is the story of stealing and smuggling of antiquities and art
treasures from India to offshore safe havens. Anything can be brought
in those countries but getting them back is a herculean task.
Hope India deals with heightened diplomacy with so-called least
corrupt countries to bring those money back at least.

from:  Aditya
Posted on: Feb 13, 2012 at 18:06 IST

What a revelation! This fact has been known and discussed for years
and had raised quiet a lot of eye brows but it starts where it ends. I
guess a lot of us also believe that there will never be a solution for
this menace, a surprising fact that i read recently, one of the
readers posted saying "in fact black money is a better deal to keep
the economy moving".

I believe until and unless the Judicial system is not pugnacious,
India will have a tough time.

from:  Karthik
Posted on: Feb 13, 2012 at 17:32 IST

This is really pathetic! No wonder it is the double faced politicians
who are behind all this, and many of them are ruling this country in the
center and various states. India could not educate its people for the
past 60 years. It is a mistake to expect that something will be done to
get the money back.

from:  Gautam
Posted on: Feb 13, 2012 at 17:29 IST

The real amount, perhaps, is much more and the release of such figures is to desensitize the
people for the time when they hear about the actual amount, they won't be as shocked!!

from:  Saratcchandran
Posted on: Feb 13, 2012 at 17:03 IST

Almost 25 lakhs INR per Indian.

The big question is, if the money comes to India, will it destabilize the economy? As the prices will go high due to increase in buying power.

Secondly, due to lack of strict anti-corruption laws, the money will end up going into the same pockets again.

from:  Kumar
Posted on: Feb 13, 2012 at 17:01 IST

Hope the people who have stashed the money also reading this write up and comments?. Dear depositor you are the best advisor to come with a solution to help the Government of India. If the India government declares a tax holiday and declare all that black as white, and assure you that no income tax raid will be conducted and no more questions will be asked about the source of fund will you be interested to get the money back and invest in India? .By doing so you will be doing a noble cause not only for your generation next but for the millions of the entire nation. After all it is their money only. Think a while how unlawful you were in stashing that big money. If you breathe your last all on a sudden what will be fate of that cash. Sure even your children will not be knowing about it. Your word will be the final and binding. Certainly the government can come with noble ideas. Don't reveal your identity simply comment, the rest will be taken care by the Hindu.

from:  Bose A Panicker
Posted on: Feb 13, 2012 at 16:39 IST

It is pity to know that in spite of having DTAAs/TIEAs with these countries, India is still struggling for getting back the well known black-moneys stashed with them.

from:  Vishal
Posted on: Feb 13, 2012 at 16:04 IST

OOPS! Thats the huge amont of money without paying any government tax. So called black money without a offical regulations.The CBI doing great work,doing all the audit work for the country.

from:  Satendra Kumar
Posted on: Feb 13, 2012 at 16:01 IST

What a peculiar condition! Usually poor will try to loot rich. But in our country it is opposite! When English people were ruling,we were having a chance to blame. At least now we have to appreciate Anna and Baba for bringing awareness.

from:  C S Sundaresha
Posted on: Feb 13, 2012 at 16:01 IST

Mind boggling...this is the first time we are hearing this figure from an authoritative personnel. Amazing...worse than our British rulers who plundered from us. On one side, with such a greedy lot who have stashed away such a huge amount,and on the other people are struggling in Slums. Imagine how our country could be so prosperous if those money came back into our system...

from:  Subramanian
Posted on: Feb 13, 2012 at 15:57 IST

Corrupt money is such an intricate web spread out globally. In India, there is bribery in every single walk of life, with almost everyone indulging in it with impunity. It's the politicians, bureaucrats, police and various educational institutions which are the worst practitioners of this trade. It's distressingly remarkable to sense the loss of conscience in India. Corruption and graft have crippled every single corner of the society, which has become morally decadent. And there is another section of people who are convinced that nothing can be done about it and that our country will go from bad to worse. I have to admit I am one among them. Everything has got to have a logical conclusion. One fears that ours might not be a good one.

from:  Balagopal P. Menon
Posted on: Feb 13, 2012 at 15:55 IST

@ DS Murli How does the data provided by Swiss Bank show that India has deposited 'Black Money'? Fallacy 1. Indians deposit money into Swiss Banks because Reason 1. They don't have to pay the Tax on the Interest then. Paying 30% (earlier 40%) Income Tax is stupidity when you are earning a meager interest of 8.5% and the Inflation is 10.5% (Forget the rosy govt figures). It means. if you keep money in Indian Banks, your capital is loosing value and your Interest is being taxed. Reason 2. Deposit in dollar amounts. Earn the Interest of 1.5-2% and the Re-Vs $ trend being what it is, your capital will be safe if not appreciate. Reason 3. Reroute the money through FDIs. Have the stock market boom thru FDIs and further make your capital / investment grow. Reason 4. Keep it safe from the grubby politicians and corrupt babus in India. Now why will some smart Indian, who has got brains to have made money, invest in Indian Banks and not in safe havens?? Patriotism? Fundamentals?? HA!

from:  Raxas
Posted on: Feb 13, 2012 at 15:54 IST

This is the saddest piece of news I have read. How can Indians be so greedy when their own countrymen don't have any good food, water or security. I remember Mr. Mukherjee saying that it was all just hearsay in the parliament. I am not voting Congress next elections!

from:  bhairav
Posted on: Feb 13, 2012 at 15:25 IST

"According to the data provided by the Swiss bank, India has more black money than rest of the world combined. India topping the list with almost $1500 Billion black money in swiss banks, followed by Russia $470 Billion, UK $390 Billion, Ukraine $100 Billion and China with $96 Billion.It's embarrassing for any country to top the list of black money holders..... An amount which is 13 times larger than the nations foreign debt. Every year this amount is increasing at a rapid speed but the Indian government seem to be silent over this matter from a very long time. The total black money accounts for 40% of GDP of India, if all the money comes back to India then that could result in huge growth burst for India..." Historically, our country has been subjected to looting by foreign invaders who took away our wealth on massive scales over a period of time. At least, we could see some logic in their looting. But instantly, it is our own country men who have been indulging in loot.

from:  Devulapalli Srinivasa Murti
Posted on: Feb 13, 2012 at 15:22 IST

Finally all Indians know an approximate official figure on how much illegal money is stashed in tax heavens from India. Thanks to the CBI director, Mr. A.P. Singh for revealing the facts known to the government. Appreciate the Interpol initiative on anti-corruption and asset recovery; I am even glad for CBI taking active part and for India hosting the first of such gathering. Waiting with lot of hope to see the results!!!!

from:  Prasad
Posted on: Feb 13, 2012 at 15:13 IST

Some of the facts are true. Like the Criminals investing in a third country and it is difficult to track because of the non-cooperation from the tax-havens. However, he made no mention on the daily bribes paid by our citizens for getting their basic needs fulfilled, these bribe takers are not extremely rich to deposit in Foreign havens... I don't remember a dime of these funds confiscated... What about our politicians and cronies? What about our Police/Govt. Officers harassing and extorting money? So I humbly beg to stop the blame game and come up with plans and actions to first clear the house... Yes, Politicians(+criminals) will make blockheads but if the investigator is smart, couldn't he outwit these mess?

from:  Bharat
Posted on: Feb 13, 2012 at 15:12 IST

So, What to do?....To show Anna The Black Mumbai

from:  Srikant
Posted on: Feb 13, 2012 at 15:11 IST

Does this 500 Billion USD include the money looted by the politicians or only businessmen and others?

from:  Kasi Viswanath
Posted on: Feb 13, 2012 at 15:04 IST

Good to see changing times; challenges are bound to increase for a vibrant economy like India.

from:  abhishek
Posted on: Feb 13, 2012 at 15:00 IST

We have heard about these reports, we have read a lot, we have discussed a lot on this..for years and years...BUT..what we have not seen is ACTION on this matter...Period.

from:  Anand
Posted on: Feb 13, 2012 at 14:57 IST

that is a large sum of money. efforts should be made to get back those funds back to india

from:  madhusudhan
Posted on: Feb 13, 2012 at 14:54 IST
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