The unearthing of capital flight of black money Indians have allegedly stashed away in Swiss banks could add USD 30 billion to the country’s forex reserves, says a Bank of America Merrill Lynch (BofA-ML) report.
According to the global financial services major, though there would not be any immediate forex impact given the legal issues involved, it could add USD 30-35 billion to the forex reserves over time.
BofA-ML has worked with an estimate of capital flight of about USD 200 billion based on a recent research study.
According to the study, Raghbendra Jha and Duc Nguyen Truong, of Australian National University, estimated total capital flight of more than USD 186 billion during 1998-2012.
“If even half of this is unearthed, it could add USD 30-35 billion (three to four months of current import cover) to forex reserves over time,” BofA-ML said in a research note.