Indians' Funds In Swiss Banks Surge To More Than Rs 20,000 Crore, Highest In 13 Years

The top 10 nations with highest deposits include West Indies, France, Hong Kong, Germany, Singapore, Luxembourg, Cayman Islands and Bahamas.

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New Delhi: Swiss banks have always remained safe havens for wealthy Indians.  Now, the funds held by Indian individuals and firms in Swiss banks rose over 2.55 billion Swiss francs (over Rs 20,700 crore) in 2020, the highest in 13 years.

Bucking the trend

This year is different as it witnessed a reversal of a two-year declining trend. The aggregate funds of Indian clients with Swiss banks in 2019 stood at 899 million Swiss francs (Rs 6,625 crore). (Swiss fracs = CHF)

In 2006, the figures touched a record high of nearly CHF 6.5 billion after which it has declined except for a few years including in 2011, 2013 and 2017, as per the Swiss National Bank (SNB) data.

There has been a sharp increase in holdings via securities and similar instruments even as customer deposits fell, as per June 17 annual data from Switzerland's central bank.

The total amount of CHF 2,554.7 million (Rs 20,706 crore), described by the SNB as 'total liabilities' of Swiss banks or 'amounts due to' their Indian clients at the end of 2020, included CHF 503.9 million (over Rs 4,000 crore) in customer deposits, CHF 383 million (over Rs 3,100 crore) held via other banks, CHF 2 million (Rs 16.5 crore) through fiduciaries or trusts and the highest component of CHF 1,664.8 million (nearly Rs 13,500 crore) as 'other amounts due to customers' in form of bonds, securities and various other financial instruments.

While the funds classified as 'customer account deposits' have actually declined from CHF 550 million at the end of 2019 and those through fiduciaries also more than halved from CHF 7.4 million, the money held via other banks rose sharply from CHF 88 million in this period.

However, the biggest difference noticed is the surge in 'other amounts due to customers' from India, which rose over six times from CHF 253 million at 2019-end.

What is the tax framework between Switzerland and India?

An automatic exchange of information in tax matters between Switzerland and India is under 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 to be followed every year.

On this front, Switzerland has been actively sharing details about accounts of Indians suspected to have indulged in financial wrongdoings after submission of prima facie evidence. This kind of exchange of information took place in hundreds of cases so far.

What about deposits of other countries?

Overall, customer deposits in Swiss banks rose in 2020 to nearly CHF 2 trillion, which included over CHF 600 billion of foreign customer deposits. Among other countries, United Kingdom remained at the top for foreign clients' money in Swiss banks at CHF 377 billion followed by United States (CHF 152 billion) -the only two countries with 100-billion-plus client funds.

The top 10 nations with highest deposits include West Indies, France, Hong Kong, Germany, Singapore, Luxembourg, Cayman Islands and Bahamas. India was placed at 51st place, ahead of countries like New Zealand, Norway, Sweden, Denmark, Hungary, Mauritius, Pakistan, Bangladesh and Sri Lanka.

(With inputs from PTI)