New Delhi/Zurich, Jun 20 – Funds held by Indian individuals and firms in Swiss banks have plummeted by 70% in 2023 to a four-year low of 1.04 billion Swiss Francs (Rs 9,771 crore), according to the latest annual data from Switzerland’s central bank.
This marks the second consecutive year of decline after funds peaked at a 14-year high of CHF 3.83 billion in 2021. The sharp decrease was primarily driven by a significant drop in funds held through bonds, securities, and other financial instruments. Additionally, there was a notable reduction in customer deposit accounts and funds held through other bank branches in India.
These figures, reported by banks to the Swiss National Bank (SNB), do not reflect the quantum of alleged black money held by Indians in Switzerland. They also exclude funds held by Indians, NRIs, or others in the names of third-country entities.
The total amount of CHF 1,039.8 million, described by the SNB as ‘total liabilities’ or ‘amounts due to’ Indian clients at the end of 2023, comprised CHF 310 million in customer deposits (down from CHF 394 million in 2022), CHF 427 million held 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 bonds, securities, and other financial instruments (down from CHF 1,896 million).
Historically, the total amount reached a record high of nearly CHF 6.5 billion in 2006 but has mostly trended downwards since, except for a few years including 2011, 2013, 2017, 2020, and 2021.
The SNB data includes all types of funds of Indian customers at Swiss banks, encompassing deposits from individuals, banks, and enterprises. It also covers data from Swiss bank branches in India and non-deposit liabilities.
Separately, the Bank for International Settlements (BIS) locational banking statistics, deemed more reliable for measuring deposits by Indian individuals in Swiss banks, showed a near 25% decline in such funds during 2023 to USD 70.6 million (Rs 663 crore). This decline follows an 18% drop in 2022 and an over 8% decrease in 2021, after a nearly 39% rise in 2020. The BIS data, which includes deposits and loans of Indian non-bank clients at Swiss-domiciled banks, peaked at over USD 2.3 billion at the end of 2007.
Swiss authorities have consistently maintained that assets held by Indian residents in Switzerland cannot be considered ‘black money’ and have supported India in its fight against tax fraud and evasion. Since 2018, an automatic exchange of information framework has been in place, providing detailed financial information on Indian residents with accounts in Swiss financial institutions to Indian tax authorities.
In addition, Switzerland has shared details on accounts of Indians suspected of financial wrongdoings following the submission of prima facie evidence. This exchange of information has occurred in hundreds of cases.
Overall, foreign clients’ funds in Swiss banks declined to CHF 983 billion in 2023 from CHF 1.15 trillion in 2022. Indian clients accounted for CHF 1.46 million in assets, a 63% decline 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 led foreign clients’ funds in Swiss banks with CHF 254 billion, followed by the US (CHF 71 billion) and France (CHF 64 billion). India was ranked 67th, down from 46th in 2022. Pakistan’s funds dipped to CHF 286 million from CHF 388 million, while Bangladesh saw a sharp decline from CHF 55 million to CHF 18 million.
The issue of alleged black money in Swiss banks remains a contentious political topic in India and its neighboring countries.
