The total funds held by Indian individuals and firms in Swiss banks fell sharply by 70 per cent in 2023, reaching a four-year low of 1.04 billion Swiss Francs (approximately Rs 9,771 crore), according to annual data released by the Swiss National Bank (SNB) on Thursday. This marks the second consecutive year of decline, following a 14-year high of CHF 3.83 billion in 2021.
The steep reduction in Indian funds was primarily driven by a significant drop in holdings through bonds, securities, and other financial instruments. Additionally, customer deposit accounts and funds held via other bank branches in India saw substantial decreases.
These figures, reported by Swiss banks to the SNB, do not reflect the alleged black money held by Indians in Switzerland. They also exclude funds held in Swiss banks by Indians, Non-Resident Indians (NRIs), or others under third-country entities.
At the end of 2023, the total amount of CHF 1,039.8 million included CHF 310 million in customer deposits (down from CHF 394 million in 2022), CHF 427 million via other banks (down from CHF 1,110 million), CHF 10 million through fiduciaries or trusts (down from CHF 24 million), and CHF 302 million in other financial instruments (down from CHF 1,896 million).
This total had peaked at nearly CHF 6.5 billion in 2006 but has generally been declining, with some exceptions in 2011, 2013, 2017, 2020, and 2021.
The Bank for International Settlements (BIS) also reported a nearly 25 per cent drop in funds held by Indian individuals in Swiss banks in 2023, amounting to $70.6 million (Rs 663 crore). This follows declines of 18 per cent in 2022 and over 8 per cent in 2021, after a 39 per cent increase in 2020.
Swiss authorities have consistently asserted that assets held by Indian residents in Switzerland should not be considered as black money. Since 2018, an automatic exchange of financial information between Switzerland and India has been in place, with detailed data shared annually with Indian tax authorities.
In addition, Switzerland has cooperated in sharing account details of Indians suspected of financial misconduct, based on prima facie evidence, with hundreds of cases reported so far.
The overall funds of foreign clients in Swiss banks also declined to CHF 983 billion in 2023 from CHF 1.15 trillion in 2022. Indian clients' assets fell by 63 per cent to CHF 1.46 million, the lowest level in over two decades, although dues from Indian customers increased to CHF 188 million from CHF 164 million in 2022.
The UK remained the largest holder of foreign funds in Swiss banks at CHF 254 billion, followed by the US (CHF 71 billion) and France (CHF 64 billion). India dropped to 67th place from 46th in 2022, while Pakistan's funds fell to CHF 286 million and Bangladesh's to CHF 18 million. The issue of alleged black money in Swiss banks remains a contentious political topic in India and its neighbouring countries.