- Sunday, February 23, 2025
By: Shubham Ghosh
Shubham Ghosh
INDIA’S finance ministry on Saturday (19) said Indian customer deposits in Swiss banks have gone down since 2019 but added that it is seeking details from the authorities of the European nation on the relevant facts and their opinions on possible reasons why the funds parked by individuals and entities there in 2020 have changed.
The ministry said in a statement that the deposits have come down by half but did not divulge the numbers.
PTI reported quoting data from Switzerland’s central bank to report on Thursday (17) that funds kept by Indian individuals and firms in the Swiss banks, including through India-based branches and other financial institutions, went up to a 13-year high to 2.55 billion Swiss francs ($2762.5 million) last year based on a sharp rise in holdings via securities and other similar instruments, even though the customer deposits fell.
The finance ministry said in a statement that the figures “do not indicate the quantum of 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.”
It also said that the customer deposits saw a fall from the end of 2019 and the funds held through fiduciaries have also more than halved since 2019 end.
“The biggest increase is in ‘Other amounts due from customers’. These are in form of bonds, securities and various other financial instruments,” the ministry added.
The ministry also spoke about the reasons that could have led to the rise in deposits, including rising business transactions by Indian firms, rise in deposits owing to the business of Swiss bank branches in India and increase in inter-bank transactions between the banks in Switzerland and India.
“The Swiss Authorities have been requested to provide the relevant facts along with their view on possible reasons for increase/decrease….,” the ministry said.
An automatic exchange of information in issues like tax has been force between India and Switzerland has been in force since 2018. Under this framework, detailed financial information on all Indian residents who have accounts with Swiss financial institutions since 2018 was provided for the first time to the Indian tax authorities in September 2019 and this has to be followed yearly.
According to the Indian finance ministry, exchanges of financial account information related to residents of both nations have taken place between both the nation in 2019 and 2020.
“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 which is out of undeclared incomes of Indian residents,” it said.
As per data of the Swiss National Bank (SNB), the aggregate funds of Indian clients with Swiss banks were at 899 million Swiss francs ($973 million) in 2019 end and the rise in 2020 reversed a two-year declining trend.
