No significant chance of Indians’ Swiss bank deposits rising: Finance Ministry

The headquarters of the Swiss central bank is pictured in Bern, Switzerland. File   | Photo Credit: AP

The Finance Ministry has asserted that ‘there does not appear to be any significant possibility’ of an increase in Swiss bank deposits from undeclared incomes of Indians, but has requested Swiss authorities to provide the ‘relevant facts’ and ‘possible reasons’ for changes in deposit numbers.

The ministry, reacting to reports of Indians stashing away more funds in Swiss banks through 2020, claimed customer deposits have actually fallen from the end of 2019. However, it cited several factors that could ‘potentially explain the increase in deposits,’ such as Indian companies holding more funds in Switzerland due to increased business transactions.

“The Swiss authorities have been requested to provide the relevant facts along with their view on possible reasons for increase/decrease in the light of media reports,” the statement said, referring to reports that funds of Indians in Swiss banks rose from ₹6,625 crore at the end of 2019 to ₹20,700 crore at the end of 2020. The reported surge in deposits has been reported as the highest in 13 years, it added.

The ministry said that reports about the spurt in Swiss bank deposits ‘allude’ to official figures reported by banks to Swiss National Bank (SNB) and do not indicate the quantum of the much-debated alleged black money held by Indians in Switzerland. “Further, these statistics do not include the money that Indians, NRIs or others might have in Swiss banks in the names of third-country entities,” the statement said.

The increase in deposits, the ministry argued, could also be due to the business of Swiss bank branches located in India, increasing inter-bank transactions between Swiss and Indian banks or a capital increase for a subsidiary of a Swiss company in India. Another factor could be an increase in the ‘liabilities connected with the outstanding derivative financial instruments’.

“The funds held through fiduciaries have also more than halved from end of 2019. The biggest increase is in “Other amounts due from customers”. These are in the form of bonds, securities and various other financial instruments,” it said in a statement on Saturday.

“In view of the existing legal arrangement for exchange of information of financial accounts (which has a significant deterrent effect on tax evasion through undisclosed assets abroad), there does not appear to be any significant possibility of the increase of deposits in the Swiss banks, out of undeclared incomes of Indian residents,” the ministry said.

India and Switzerland have been sharing such information since 2018 and both are signatories to multilateral treaties relating to mutual administrative assistance in tax matters. Bringing back black money held by Indians abroad was a key electoral plank in the 2014 general elections for the BJP.

Our code of editorial values

This article is closed for comments.
Please Email the Editor

Printable version | Jul 31, 2021 7:49:03 AM |

Next Story