India ranks 55th on foreign money in Swiss banks

[Agent_47]

Indians’ money in Swiss banks may have risen for the first time in five years, but they account for a meagre 0.14 per cent of total foreign wealth deposited there — putting India at 55th place globally for such funds.

The total overseas funds in Switzerland’s banking system stood at 1.53 trillion Swiss francs (about Rs. 90 trillion) at the end of 2011, which included 2.18 billion Swiss francs (Rs. 12,700 crore) belonging to Indian individuals and entities.

While India accounted for only 0.14 per cent of total foreign money in Swiss banks, the U.K. accounted for the largest share of little over 20 per cent, followed closely by the U.S. with about 18 per cent.

As per the latest data disclosed by Swiss National Bank (SNB), Switzerland’s central bank, India is now ranked 55th in terms of funds belonging to overseas clients in Swiss banks.

Among the top-ranked jurisdictions, the U.K. and the U.S. were followed by West Indies, Jersey, Germany, Bahamas, Guernsey, Luxembourg, Panama and France, Hong Kong, Cayman Islands, Japan, Singapore, Australia, Italy, Netherlands, Russia, Saudi Arabia and United Arab of Emirates.

The SNB data shows that the quantum of money held by Indians in the Swiss banking system rose for the first time in five years during 2011.

These official figures, described by SNB as ‘liabilities’ of Swiss banks towards their clients from various countries, do not indicate towards the quantum of the much-debated alleged black money held by Indians or other nationals in the safe havens of Switzerland.

Also, SNB’s figures do not include the money that Indians or other nationals might have in Swiss banks in others’ names. The total funds held by Indian individuals and entities include 2.025 billion Swiss francs held directly by them and 158 million held through ‘fiduciaries’ or wealth managers.

Fiduciaries are essentially wealth fund managers who hold the money of Indian private holders and families in the so-called numbered accounts.

The Swiss banks’ direct liabilities towards clients from India include funds held in savings and deposit accounts by Indian individuals, financial institutions and corporates.

India is ranked 55th in terms of only direct deposits as well, while it is placed much lower at 76th rank for fiduciary funds, where the top-ranked jurisdictions include West Indies, Panama, U.K., Saudi Arabia, Bahamas, Liberia, Cayman Islands, UAE, Turkey, Russia, Germany and the U.S.

Pakistan is ranked higher than India at 52nd place in terms of fiduciary funds (355 million Swiss francs), but lower at 60th for total money (2.12 billion Swiss francs).

While the funds belonging to Indians rose by about Rs. 3,500 crore last year, the total foreign money there rose by about Rs. two lakh crore (more than 36 billion Swiss francs).

The quantum of funds held by Indians in Swiss banks had last increased in 2006 by about one billion Swiss francs to 6.5 billion Swiss francs (over Rs 40,000 crore), but fell to less than one-third by the end of 2010.

In a White Paper on black money tabled in Parliament last month, the government had also said that Swiss banks’ total liabilities towards Indians have been coming down and fell by more than Rs. 14,000 crore between 2006 and 2010.

Amid allegations of Indians stashing huge amounts of illicit wealth abroad, including in Swiss banks, the government says it is making various efforts to bring back the unaccounted money.

As per SNB data, funds held by Indians directly in the Swiss banks increased by about 370 million Swiss francs to 2.025 billion Swiss francs (Rs 11,800 crore) in 2011.

On the other hand, the funds held through ‘fiduciaries’ nearly halved to 158 million Swiss francs (about Rs 900 crore) in 2011 — marking the fifth straight year of decline.

The experts have been saying that there has been a “perceptible flight of funds” of Indian holders from Swiss banks to other places in the recent years.

The foreign capital-friendly regulations in places like Mauritius and Dubai were possibly being exploited by those seeking to move their funds away from Swiss banks, which have come under strict scrutiny of late.

At the same time, the global pressure has been rising on Switzerland to ask its banks to share information about their clients with foreign governments.

It is suspected that Indians having illicit wealth in Swiss banks may be moving their funds in fear of being exposed due to growing scrutiny. At the same time, even those having legitimate funds in Swiss banks may be moving away, due to a growing level of negativity attached to them.

The countries placed above India in terms of total funds in Swiss banks also include Ireland, Spain, Israel, Canada, Brazil, Greece, China, Egypt, Thailand, Philippines, South Korea and New Zealand. Those ranked below India include Qatar, South Africa, Pakistan, Bahrain, Kenya, Nigeria and Iran.

The Hindu : Business / Economy : India ranks 55th on foreign money in Swiss banks

 

[ptltejas]

 

[longyi]

Without referring to India alone, it seems there's a lot of illicit and untaxed money hidden among the offshore banking system. Most of these money were probably results from crimes, corruptions and untaxed profits that could well belong to their respective governments' treasuries and if are used wisely they can well benefit all the people in each nation instead of the criminal few.

 

[Screambowl]

first of all, Swizz Banks are not just for Black money. secondly .. those who are demanding to bring back the black money.. do not know that it will create inflation. The policy should be, bringing back the solid capital, especially gold, equivalent to the money kept in the bank, when the rates are good. But I do not think it will be so easy.

 

[Lone Shooter]

Swiss banks are famous for their discreet banking system. If thats the truth than how came such statistics come out anyway?

 

[longyi]

first of all, Swizz Banks are not just for Black money. secondly .. those who are demanding to bring back the black money.. do not know that it will create inflation. The policy should be, bringing back the solid capital, especially gold, equivalent to the money kept in the bank, when the rates are good. But I do not think it will be so easy.

Because the thread is about India so let me use India as an example but by no mean I belittle your country. Let say an Indian national, through his life time, accumulated $1 trillion USD from corruptions and deposited in a Swiss bank on different increments. Every time he made the deposit he either had to change Indian Rupee to the dollar or the franc in order for the bank to accept the deposit or the bank would make the exchange for him for a fee.

By the time he accumulated $1 t, for convenience sake, the Indian Government found out and through legal actions she was awarded the money in USD. She could handle the money in 2 ways, for one she keeps the money in the same bank or other institutions as foreign reserves, thus strengthen the Rupee and lower the inflation. Or she withdraws the whole amount in USD and sell them in the open market and buys Rupees which result in reducing the Rupee in circulation, thus strengthen the Rupee also and reduce the inflation as well.

Either way is a win win for the Indian Government and her people.

 

[Screambowl]

Because the thread is about India so let me use India as an example but by no mean I belittle your country. Let say an Indian national, through his life time, accumulated $1 trillion USD from corruptions and deposited in a Swiss bank on different increments. Every time he made the deposit he either had to change Indian Rupee to the dollar or the franc in order for the bank to accept the deposit or the bank would make the exchange for him for a fee.

By the time he accumulated $1 t, for convenience sake, the Indian Government found out and through legal actions she was awarded the money in USD. She could handle the money in 2 ways, for one she keeps the money in the same bank or other institutions as foreign reserves, thus strengthen the Rupee and lower the inflation. Or she withdraws the whole amount in USD and sell them in the open market and buys Rupees which result in reducing the Rupee in circulation, thus strengthen the Rupee also and reduce the inflation as well.

Either way is a win win for the Indian Government and her people.

you are right, it will be good, if we convert the Rupees into Dollars for a good exchange market rate, when the dollar is running low. And Later when Dollar rises, Buy the Gold. Because Gold Vs Dollar value graphs are reciprocal to each other. When Dollar rises gold is cheap and when dollar falls, gold is expensive. Plus Investing in Gold is more profitable.

 

[rubyjackass]

This number is not the complete figure of funds held by Indians.


The below quote says it all. Indians have also learned the practice of stashing money in Swiss banks through holding companies in countries like Mauritius, Cayman Islands etc., Not all this money is black though. It is just a way of exploiting tax rules.

The quantum of funds held by Indians in Swiss banks had last increased in 2006 by about one billion Swiss francs to 6.5 billion Swiss francs (over Rs 40,000 crore), but fell to less than one-third by the end of 2010.