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Swiss Bank Says Black Money Held by Indians Reduced by 44%

The report said the cited figures show an increase of 50 per cent in Swiss banks’ total liabilities towards India and also include non-deposit liabilities as well as business of Swiss branches located in India.


Updated:July 24, 2018, 6:52 PM IST
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Swiss Bank Says Black Money Held by Indians Reduced by 44%
(Image only for representational purpose)

New Delhi: The black money debate in India is far from over. With Congress president Rahul Gandhi’s latest barb at the Modi government over its inability to curb black money in Swiss accounts, the focus has once again shifted to Indian money stacked in the Swiss National Bank (SNB).

The SNB, in its annual banking statistics on the 2017 banking year issued on June 28, 2018, had said there was a 50 per cent rise in liabilities towards its Indian clients. However, pointing to an error in calculation by those who concluded the rise, the bank, in its latest report, has said the Indian money parked in these accounts has actually come down by 44 per cent.

With this report, the bank has cleared the mist over the alleged rise in the deposits.

“More often than not, the reports have not taken account of the way the figures have to be interpreted, which has resulted in misleading analyses. Moreover, it is frequently assumed that any assets held by Indian residents in Switzerland are undeclared (so-called ‘Black Money’),” said SNB in a statement on Tuesday.

The surge in Indian money held with Swiss banks came as a surprise given India’s continuing clampdown on suspected black money stashed abroad, including in banks of Switzerland that used to be known for their famed secrecy walls for years.

The Indian money in Swiss banks had fallen by 45 per cent in 2016, marking their biggest-ever yearly plunge, to CHF676 million (about Rs 4,500 crore) — the lowest-ever since the European nation began making the data public in 1987.

The report said the cited figures show an increase of 50 per cent in Swiss banks’ total liabilities towards India and also include non-deposit liabilities as well as business of Swiss branches located in India.

To analyse Indian residents’ deposits held in Switzerland, another data source should be used, said the bank. “This is the so-called “locational banking statistics”, which the SNB collects in collaboration with the Bank for International Settlements (BIS). This data source shows that the liabilities in the form of loans and deposits of Swiss-domiciled banks towards Indian non-banks decreased by 44 per cent between 2016 and 2017.”

Interim finance minister Piyush Goyal on Tuesday attacked Gandhi for maligning the country’s image by raising the issue of increase in black money deposits of Indians in Swiss banks based on baseless reports.

“I think Rahul Gandhi should reply to the nation why he is maligning the image of the country on baseless report,” he told reporters outside Parliament.

Talking to News18, noted economist Pronab Sen said in order to calculate the amount of money parked, one only has to take into account the number of deposit accounts.

“Loan accounts and any other bank account other than deposit accounts should not be taken into consideration while calculating parked money. It wrongly inflates data,” said Sen, thus supporting the bank’s logic.

Goyal, on the other hand, accused Gandhi of saying baseless things without knowing the issue. "Of course, he has habit of saying things without knowing the facts. Even during the no-confidence motion, we have seen claims of Congress being demolished," he said.

In the last quarter (October-December) of 2017, there was a reduction of 44 per cent, based on locational banking statistics, Goyal added.

"This clearly reflects that people are afraid of government of India and Modi government. The government will take strict against the hoarders of black money," he said.

He further said that the government had taken a series of steps to curb generation and siphoning of black money while Congress during the UPA regime had done nothing.

"India also signed an agreement with Switzerland on December 21, 2017. Both countries started collecting data in accordance with global standards on January 1, 2018, and would start the exchange of data from September 2019 on a yearly basis," he said.

This makes relevant information available in India, which eliminates the threat of black money and action can be taken against any entity indulging in such activities, he said.

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| Edited by: Aakarshuk Sarna
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