The government has no official estimate of the black money stashed in Swiss banks for the last 10 years, Minister of State for Finance Pankaj Chaudhary told the Lok Sabha on Monday. He was responding to a question by Congress MP Vincent Pala.
The Centre’s response came a month after annual data from Switzerland’s central bank, the Swiss National Bank, showed that funds parked by Indian individuals and firms in Swiss banks rose to 2.55 billion Swiss francs (over Rs 20,700 crore) in 2020. The amount was the highest in 13 years and marked a jump of 183% from the figure reported in 2019.
Responding to a separate question on the rise in Indian funds in Swiss banks, Chaudhary said that annual banking statistics of the Swiss National Bank should not be used for analysing deposits held in Switzerland by residents of India.
Responding to the question from Congress MP Gurjeet Singh Aujla, Chaudhary cited a clarification from Swiss authorities suggesting that media reports in India about funds in Swiss banks have often resulted in “misleading headlines and analyses”.
“It is frequently assumed that any assets held by Indian residents in Switzerland are undeclared (so-called ‘Black Money’),” the Swiss authorities have said, according to Chaudhary. The minister added that customer deposits held with Swiss banks are not necessarily located in Switzerland.
Indian deposits in Swiss banks
The data released in the annual report of the Swiss National Bank is a collection of official figures reported to the central bank by various individual banks in the country. However, this data does not account for the alleged “black money” held by Indians in Switzerland.
The deposits stood at a record high of 6.5 billion Swiss francs (over Rs 52,500 crore) in 2006, following which it has mostly charted a downward trend, except for a few years in 2011, 2013 and 2017, as per the Swiss National Bank data. The deposits had declined in 2018 and 2019 as well before shooting up sharply in 2020.
In 2020, the deposits under the heads of “customer account deposits” and money held through fiduciaries and trusts declined. However, the amounts deposited through bonds, securities and various other financial instruments rose sharply from 253 million Swiss francs (Rs 2,043 crore) to 1.66 billion Swiss francs (nearly Rs 13,500 crore).
In October 2019, Swiss tax authorities had shared with India the first tranche of details about the financial accounts of Indian clients in Swiss banks under the automatic information exchange framework between the two countries. However, the finance ministry had refused to share details of the data, saying such disclosures are prohibited under “confidentiality provisions” of a tax treaty between India and Switzerland.
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