Indians' Money In Swiss Banks Hits Second Lowest Level In Two Decades

28 Jun 2019 10:22 AM GMT
Image Credit: Samayam (Representational)

The sum total of funds held by Indian individuals and enterprises in Swiss Banks have fallen by nearly 6% in 2018 to 955 Million Swiss francs (about Rs 6757 Crore), which happens to be its second-lowest level in over a past couple of decades., Swiss National Bank (PNB)’s data revealed on June 27.

In 2006, total funds held by Indians in Swiss bank stood at an all-time high of CHF 6.5 billion (Rs 23000 Crore) but it has witnessed a ten-fold decrement in about a decade.

Even the aggregate funds of all foreign clients witnessed a decrement, as it fell by 4% to CHF 1.4 Trillion (about Rs 99 Lakh Crore) in 2018, the stats were released by the Zurich-based central banking authority of Switzerland.

However, The Bank for International Settlement (BIS), which the Indian and Swiss government did cite as the more reliable source last year, released ‘locational banking statistics’, which estimated the figure of fall in funds to be 11% for 2018.

According to SNB, the data used for the evaluation of ‘total liabilities’ of Swiss Banks towards Indian clients take into consideration all sort of funds of Indian customers at Swiss banks including the deposits from individuals, banks and enterprises. This also includes data for branches of Swiss banks in India, as also non-deposit liabilities.

However, it is important to note that these official SNB figures do not consider the money that Indians, non-resident Indians (NRIs) or other that might have in Swiss banks in the names of entities from different countries.

Trends in recent years

The SNB data witnessed a rise of 50% in total liabilities of Indian clients in 2017 to CHF 1.01 billion (Rs 7000 Crore) thus reversing the downward trend of the past three years.

These funds, however, did fall to CHF 954.71 million, which consists of CHF 15 million held through fiduciaries or wealth managers. This figure is the second lowest total since CHF 723 Million recorded about two and a half decades back, in 1995.

The lowest ever amount of CHF 675 million, was recorded in 2016, the lowest since Switzerland began making data public in 1987.

The latest figure suggests that total deposits of Indian customers rose to CHF 572 million in 2018, whereas funds held through banks have fallen to CHF 104 million.

Money parked through securities and other instruments and via fiduciaries also saw a decline.

As far as the assets are concerned, Swiss banks witnessed a marginal increase in amount due to their Indian customers to CHF 212 million (from CHF 210 million in 2017).

Records level in 2006

BIS data, on the contrary, showed the total dip to be much larger, estimated at $84.6 million at the end of 2018 (down by 11% from 94.8 million at the end of 2017).

The BIS publishes figures on a quarterly basis, which stated that funds rose during the first quarter of 2018 (to $100.9 million), but declined in the subsequent quarters.

Annual SNB data has shown a four-fold decrement in the past five years, the fall was maximum at 45% in 2016.

The fears of regulatory crackdowns on funds have led to a substantial decrease in funds held by Indians through fiduciaries, which rose to billions in 2007.

For the autonomous exchange of information between Switzerland and India, a new framework has been put in place to keep a check on issues concerning black money, this system has been effective since January 1, 2018.

Also Read: Fact Check: Have Deposits By Indians In Swiss Banks Decreased?

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