Securities boom, institutional holdings take deposits in Swiss banks to 14-year high
Securities boom, institutional holdings take deposits in Swiss banks to 14-year high
Funds deposited by Indian individuals and firms in Swiss banks through India-based branches and other financial institutions rose to a 14-year high of 3.83 billion Swiss francs (over ₹30,500 crore) in 2021 on a sharp jump in holdings . Customer deposits in securities and similar instruments also rose, annual data from Switzerland’s central bank showed on Thursday.
The increase in total funds of Indian customers with Swiss banks, from 2.55 billion Swiss francs (₹20,700 crore) at the end of 2020, marks the second consecutive year of growth.
Further, funds held in savings or deposit accounts of Indian customers rebounded from a two-year decline to a seven-year high of around ₹4,800 crore.
The total amount of CHF (Swiss francs) 3,831.91 million described by the Swiss National Bank (SNB) as the ‘total liabilities’ of Swiss banks or ‘dues’ of their Indian customers at the end of 2021, the customer includes CHF 602.03 million. Deposits (up from CHF 504 million at the end of 2020), CHF 1,225 million through other banks (up from CHF 383 million), and CHF 3 million through fiduciaries or trusts (up from CHF 2 million).
The highest component of CHF 2,002 million (up from CHF 1,665 million) was ‘other amounts payable to customers’ in the form of bonds, securities and various other financial instruments.
The total amount was at a record high of around 6.5 billion Swiss francs in 2006, after which it has mostly been on the downside, except for a few years in 2011, 2013, 2017, 2020 and now 2021. SNB data.
While there was a decline in all four components during 2019, the year 2020 saw a significant decline in customer deposits, while 2021 saw an increase across all categories.
These are official figures reported by banks to the SNB and do not indicate the quantum of the much talked about alleged black money held by Indians in Switzerland. These figures also do not include money that Indians, NRIs or others may have in Swiss banks in the name of third country entities.
According to SNB, its data for ‘total liabilities’ of Swiss banks towards Indian customers takes into account all types of funds held by Indian customers in Swiss banks, including deposits from individuals, banks and enterprises. This includes branches of Swiss banks in India as well as non-deposit liabilities.
On the other hand, the ‘local banking data’ of the Bank for International Settlement (BIS), which has in the past been described by Indian and Swiss authorities as a more reliable measure for deposits by Indian individuals in Swiss banks, showed a decline. . After rising nearly 39% to $125.9 million (₹932 crore) during 2020, such funds grew 8.3% to $115.5 million (₹927 crore at current exchange rates) during 2021.
The figure takes into account deposits and loans of Indian non-bank customers of Swiss-dominated banks and grew by 7% in 2019 after a decline of 11% in 2018 and 44% in 2017. It reached its peak. $2.3 billion (over ₹9,000 crore) at the end of 2007.
The Swiss authorities have always maintained that the assets of Indian residents in Switzerland cannot be treated as ‘black money’ and actively support India in the fight against tax fraud and evasion.
Automatic exchange of information on tax matters between Switzerland and India has been in place since 2018. Under this framework, detailed financial information on all Indian residents holding accounts with Swiss financial institutions since 2018 was first provided to Indian tax authorities in September. 2019 and it has to be done every year.
In addition, Switzerland is actively sharing details of accounts of Indians who are suspected of having indulged in financial wrongdoing after producing prima facie evidence. Such exchange of information has happened in hundreds of cases so far.
Overall, customer deposits across the Swiss banking spectrum, which includes 239 banks, increased to approximately CHF 2.25 trillion in 2021. The total funding of foreign clients, including institutions, increased to approximately CHF 1.5 trillion (₹118 lakh crore).
In terms of assets (or money payable from customers), Indian customers accounted for CHF 4.68 billion at the end of 2021, which was about 10%. This includes outstanding dues of around 323 million CHF from Indian customers after an increase of 25% during the year.
While the United Kingdom topped the charts for Swiss banks with foreign clients money at CHF 379 billion, it was followed by the US (CHF 168 billion) in second place – the only two countries with more than 100 billion client funds.
Others in the top 10 were the West Indies, Germany, France, Singapore, Hong Kong, Luxembourg, the Bahamas, the Netherlands, the Cayman Islands and Cyprus.
India was ranked 44th ahead of countries such as Poland, South Korea, Sweden, Bahrain, Oman, New Zealand, Norway, Mauritius, Bangladesh, Pakistan, Hungary and Finland.
Among the BRICS countries, India ranks below Russia (15th) and China (24th), but above South Africa and Brazil.
Others placed over India include UAE, Australia, Japan, Italy, Spain, Panama, Saudi Arabia, Mexico, Israel, Taiwan, Lebanon, Turkey, Austria, Ireland, Greece, Bermuda, Marshall Islands, Liberia, Belgium, Malta, Canada is included. Portugal, Qatar, Egypt, Thailand, Kuwait and Jordan.
Pakistan saw an increase in the funds of its citizens and enterprises to CHF 712 million, while for Bangladesh it increased to CHF 872 million.
Like in India, the issue of alleged black money in Swiss banks has been a political hotbed in both the neighboring countries.
Following the release of the annual data last year, the Indian government had sought details from the Swiss authorities regarding the facts as well as their views on possible reasons for the change in funds deposited by individuals and entities in 2020.
In its statement, the Finance Ministry had said that the figures “do not indicate the amount of alleged black money held by Indians in Switzerland. Further, these figures do not include money held by Indians, NRIs or others in Swiss countries.” Maybe in banks. In the name of third country entities.” It also listed reasons that could have led to an increase in deposits, including increased business transactions by Indian companies, an increase in deposits due to the business of Swiss bank branches located in India, and an increase in inter-bank transactions between Swiss and Indian. was involved. Bank.