New Delhi: Indians have “few deposits” in Swiss banks compared to other global financial hubs such as Singapore and Hong Kong, says a grouping of private bankers in Switzerland amid stepped-up efforts to check the black money menace. Money held by Indians in Swiss banks declined to a record low of 1.2 billion franc (about Rs 8,392 crore) at the end of 2015, as per the latest available official data. However, no official data is available for money in other global hubs.
Committing itself to the global framework for automatic exchange of tax information, Switzerland last week ratified the decision to implement this regime with India and 40 other jurisdictions. The framework for automatic exchange of information requires strict adherence to data confidentiality, but the Geneva-based Association of Swiss Private Banks said it has no particular concern over India, where the rule of law seems to be properly upheld.
“There are also rather few deposits of Indian residents in Switzerland, as opposed to Singapore or Hong Kong for instance,” the association’s manager Jan Langlo said in Geneva. When asked about trends in terms of deposits from Indian residents, Langlo said it has not noticed any particular trend. “It is simply more practical for them to open an account in an Asian financial centre than in Switzerland,” Langlo noted.
Currently, the association has nine member banks employing around 7,500 people across the globe, as per its website. The grouping represents the business interests of privately-owned Swiss banks that specialise in wealth management.
According to data from the Swiss National Bank, the funds held by Indians with banks in Switzerland fell by CHF 596.42 million to CHF 1,217.6 million at the end of 2015. It was the lowest amount of funds held by Indians in the Swiss banks ever since the Alpine nation began making the data public in 1997 and marked the second straight year of decline. The funds held by Indians with Swiss banks stood at a record high of CHF 6.5 billion (Rs 23,000 crore) at 2006-end.
However, the quantum of these funds has been falling since then, except for in 2011 and in 2013 when Indians’ money had risen by over 12% and 42%, respectively.
India will have to ensure strict confidentiality of information about its citizens’ Swiss bank accounts received through the new automatic exchange window, failing which the Alpine nation will stop sharing the data. Switzerland and its banks will also keep a close watch on the data protection measures taken by India regarding the details received from other jurisdictions and want all other global financial centres to implement the global framework for automatic exchange of information (AEOI) on financial matters.