The latest set of revelations from India Against Corruption (IAC) and Arvind Kejriwal turns the spotlight squarely on the important issue of unaccounted money hoarded in banks abroad. Back in July 2011, the French government handed over a compact disc with details of 700 secret bank accounts held by Indians at HSBC Bank in Geneva. Yet for almost a year, the government staved off pressure from the Opposition and civil society to act on the dossier until May this year when the then Finance Minister, Pranab Mukherjee, released a White Paper on black money. The paper revealed that Indian citizens held deposits adding up to Rs 23,373 crore in Swiss banks in 2006. By 2010, this had come down to Rs 9,295 crore, ostensibly because part of the money had come back to India through the hawala route or was simply masquerading as foreign investment in the stock market. While the paper highlights the scale of the problem it still does not address the question of what exactly the dossier contained. Who were these 700 account holders? What were their holdings and how did they acquire that money? Mr. Kejriwal has revealed the identities of three individuals who were part of the list and made claims about a number of others but questions remain. Did the government probe all the names in the list or did it just cherry-pick the most “unconnected” ones to investigate in order to prove it was acting? If it has investigated all the 700 names, what has it discovered?

IAC’s latest exposé also raises important questions about the role of HSBC in allegedly laundering money through what amounts to hawala transactions. The charge that the bank would take cash in rupees for a deposit in dollars in its branch abroad and later reverse the transaction in similar fashion, all without anything on paper, is certainly worrying. This process, which three individuals in the list of 700 apparently admitted to using, clearly falls into a pattern given that HSBC is already under investigation in the U.S., where it is facing a $1.5 billion fine for money-laundering, and in the U.K., where it is being probed for opening offshore bank accounts for dodgy individuals and even well-known personalities. Given this, there is little doubt that the government needs to investigate the role of the bank in India and importantly, tie this in with the specific information received from France. To be sure, not every foreign bank account is illegitimate. But this fact cannot be established unless the government goes into the details of each of those accounts. A Finance Ministry statement on Saturday indicated that relevant agencies are indeed probing the matter. While that is reassuring, it is best if the broad results of this probe — including details of punitive action taken, if any — are made public as soon as possible.

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