Finance Ministry refutes news reports of alleged black money held by Indians in Switzerland

The Finance Ministry on Saturday refuted claims that funds of Indians in Swiss Banks have risen to over Rs 20,700 crore in 2020, the highest figure of deposits in the last 13 years.

“Certain reports have appeared in the media on 18.06.2021 stating that funds of Indians in Swiss Banks have risen to over Rs 20,700 crore (CHF 2.55 billion) at the end of 2020 from Rs 6,625 crore (CHF 899 million) at the end of 2019, reversing a 2-year declining trend. It has also been stated that this is also the highest figure of deposits in the last 13 years,” the ministry said.

The ministry said that the media reports allude to the fact that the figures reported are official figures reported by banks to the Swiss National Bank (SNB) and do not indicate the quantum of much-debated alleged black money held by Indians in Switzerland.

Further, these statistics do not include the money that Indians, NRIs or others might have in Swiss banks in the names of third-country entities.

However, the customer deposits have actually fallen from the end of 2019. The funds held through fiduciaries have also more than halved from the end of 2019. The biggest increase is in “Other amounts due from customers”. These are in form of bonds, securities and various other financial instruments.

It is pertinent to point out that India and Switzerland are signatories to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC) and both countries have also signed the Multilateral Competent Authority Agreement (MCAA) pursuant to which, the Automatic Exchange of Information (AEOI) is activated between the two countries for sharing of financial account information annually for the calendar year 2018 onwards.

Exchanges of Financial Account information in respect of residents of each country have taken place between both countries in 2019 as well as 2020.

In view of the existing legal arrangement for the exchange of information of financial accounts (which has a significant deterrent effect on tax evasion through undisclosed assets abroad), there does not appear to be any significant possibility of the increase of deposits in the Swiss banks which is out of undeclared incomes of Indian residents.

The Finance Ministry has also sought the relevant facts from Swiss Authorities along with their view on possible reasons for the increase/decrease in funds.

Leave a Reply