Indians' Swiss Bank Holdings Tumble 70% To Touch Four-Year Low

The amount of money deposited by Indian individuals and companies in Swiss banks decreased significantly. This includes the deposits through their local branches and other financial institutions.

Over all a 70% was recorded in 2023, reaching a four-year low of 1.04 billion Swiss Francs, approximately Rs 9,771 crore, according to the yearly data released by Switzerland's central bank on Thursday.

The consecutive yearly decline in aggregate funds of Indian clients with Swiss banks, following a 14-year peak of CHF 3.83 billion in 2021, was primarily attributed to a significant drop in funds held via bonds, securities, and other financial instruments.

Additionally, the funds in customer deposit accounts and those held through other bank branches in India have seen a significant decrease, according to the data.

The figures reported by banks to the Swiss National Bank are official and do not reflect the total amount of the widely discussed alleged black money held by Indians in Switzerland. Additionally, these numbers do not account for funds that Indians, NRIs, or others may hold in Swiss banks under the names of entities from third countries.

The 'total liabilities' of Swiss banks or 'amount due to' their Indian clients at the end of 2023 stood at CHF 1,039.8 million, according to SNB.

This includes CHF 310 million in customer deposits (down from CHF 394 million at 2022-end), CHF 427 million held via other banks (down from CHF 1,110 million), CHF 10 million (down from CHF 24 million) through fiduciaries or trusts, and CHF 302 million as 'other amounts due to customers in form of bonds, securities and various other financial instruments (down from CHF 1,896 million).

The total amount stood at a record high of nearly 6.5 billion Swiss francs in 2006, which was followed by a downward path, except for a few years including in 2011, 2013, 2017, 2020 and 2021, as per SNB data.

While all four components had declined during 2019, the year 2020 saw a significant plunge in customer deposits, while there was a surge across all categories in 2021. During 2022, only the fiduciaries segment saw an increase.

The 'locational banking statistics' of the Bank for International Settlement, which have been described in the past by Indian and Swiss authorities as a more reliable measure for deposits by Indian individuals in Swiss banks, showed a decline of nearly 25% during 2023 in such funds to $70.6 million (Rs 663 crore).

It had dropped by 18% in 2022 and by over 8% in 2021, after rising by nearly 39% in 2020.

This figure takes into account deposits as well as loans of Indian non-bank clients of Swiss-domiciled banks and had shown an increase of 7% in 2019, after declining by 11% in 2018 and by 44% in 2017.

It peaked at over $2.3 billion (over Rs 9,000 crore) at the end of 2007.

Swiss authorities have always maintained that assets held by Indian residents in Switzerland cannot be considered as 'black money' and they actively support India in its fight against tax fraud and evasion.

An automatic exchange of information in tax matters between Switzerland and India has been in force since 2018. Under this framework, detailed financial information on all Indian residents having accounts with Swiss financial institutions since 2018, was provided for the first time to Indian tax authorities in September 2019 and this is being followed every year.

In addition to this, Switzerland has been actively sharing details about accounts of Indians suspected to have indulged in financial wrongdoings after the submission of prima facie evidence. Such exchange of information has taken place in hundreds of cases so far.

The overall funds of foreign clients, including institutions, declined to CHF 983 billion (over Rs 92 lakh crore) in 2023, from CHF 1.15 trillion at the end of 2022.

In terms of assets, Indian clients accounted for CHF 1.46 million at the end of 2023, marking a decline of 63% from the previous year and the lowest level in over two decades.

This included dues from Indian customers worth about CHF 188 million, up from CHF 164 million at the end of 2022.

The UK leads the ranking for foreign clients' funds in Swiss banks with CHF 254 billion, followed by the US with CHF 71 billion and France with CHF 64 billion in second and third places, respectively.

Following these are the West Indies, Germany, Hong Kong, Singapore, Luxembourg, and Guernsey in the top 10.

India is ranked 67th, a decline from the 46th position at the end of 2022.

(With inputs from PTI)