Finance Ministry Rejects Reports Of Rs 20,700 Cr Worth Black Money Held By Indians In Swiss Banks

Finance Ministry even asserted that Indian customer deposits in Swiss banks have fallen since 2019, but said it is seeking details from Swiss authorities.

New Delhi: Refuting news media reports of alleged black money held by the Indians in Switzerland, the government on Saturday said the Swiss authorities have been requested to provide the relevant facts along with their views on possible reasons for increase/decrease of deposits.

Pointing out that certain reports have appeared in the media on June 18 stating that funds of Indians in Swiss Banks have risen to over Rs 20,700 crore at the end of 2020 from Rs 6,625 crore at the end of 2019, thereby reversing a two-year declining trend, the Finance Ministry said it has also been stated that this is also the highest figure of deposits in the last 13 years.

The Finance Ministry said the media reports allude to the fact that the figures reported are official figures reported by banks to Swiss National Bank (SNB) and do not indicate the quantum of much debated alleged black money held by the 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,” the ministry added in a release.

Stating the customer deposits have, however, actually fallen from 2019 end, the Finance Ministry said the funds held through fiduciaries has also more than halved from end of the same year.

Pointing out the biggest increase is in “Other amounts due from customers”, the Finance Ministry said these are in form of bonds, securities and various other financial instruments.

 

The Finance Ministry informed India and Switzerland are signatories to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC), adding both nations have also signed the Multilateral Competent Authority Agreement (MCAA) pursuant to which, the Automatic Exchange of Information (AEOI) is activated for sharing of financial account information annually from 2018 onwards.

Highlighting exchanges of financial account information in respect of residents of each country have taken place between both sides in 2019 as well as 2020, the Finance Ministry said 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 in view of the existing legal arrangement for exchange of information of financial accounts.

The Finance Ministry further listed five factors, including increase in the deposits held by Indian companies in Switzerland owing to increased business transactions and increase in deposits owing to the business of Swiss Bank branches located in India, that could potentially explain the increase in deposits.

The increase in inter- bank transactions between Swiss and Indian banks, a capital increase for a subsidiary of a Swiss company in India and increase in the liabilities connected with the outstanding derivative financial instruments were the other factors mentioned by the ministry.