According to annual data from Switzerland’s central bank, funds parked by Indian individuals and firms in Swiss banks decreased by 70% in 2023, reaching a four-year low of 1.04 billion Swiss Francs (Rs 9,771 crore). This decline marked the second consecutive year of decreasing aggregate funds of Indian clients with Swiss banks after reaching a 14-year high of CHF 3.83 billion in 2021. The decline was primarily driven by a sharp decrease in funds held through bonds, securities, and various other financial instruments. The data also showed a significant decline in the amount held in customer deposit accounts and funds held through other bank branches in India.
It’s important to note that these figures reported by banks to the Swiss National Bank (SNB) do not indicate the amount of alleged black money held by Indians in Switzerland. Additionally, these figures do not include funds held by Indians, NRIs, or others in Swiss banks under the names of third-country entities.
Breakdown of Funds and Total Liabilities
At the end of 2023, the total liabilities of Swiss banks towards their Indian clients amounted to CHF 1,039.8 million. This figure included CHF 310 million in customer deposits (down from CHF 394 million at the end of 2022), CHF 427 million held via other banks (down from CHF 1,110 million), CHF 10 million through fiduciaries or trusts (down from CHF 24 million), and CHF 302 million as other amounts due to customers in the form of bonds, securities, and various other financial instruments (down from CHF 1,896 million).
It’s worth mentioning that the total amount reached a record high of nearly 6.5 billion Swiss francs in 2006 and has mostly been on a downward path since then, with a few exceptions in 2011, 2013, 2017, 2020, and 2021.
Data from the Bank for International Settlement (BIS)
The Bank for International Settlement (BIS) provides data on deposits by Indian individuals in Swiss banks through its “locational banking statistics.” According to this data, there was a decline of nearly 25% in such funds during 2023, amounting to USD 70.6 million (Rs 663 crore). The funds had previously dropped by 18% in 2022 and over 8% in 2021, following a nearly 39% increase in 2020.
The BIS data takes into account deposits and loans of Indian non-bank clients of Swiss-domiciled banks. It showed an increase of 7% in 2019, following declines of 11% in 2018 and 44% in 2017. The peak amount recorded was over USD 2.3 billion (over ₹ 9,000 crore) at the end of 2007.
Swiss Authorities’ Stance on Indian Assets in Switzerland
Swiss authorities have consistently maintained that assets held by Indian residents in Switzerland should not be considered as “black money.” They actively support India in its fight against tax fraud and evasion. Since 2018, an automatic exchange of information in tax matters between Switzerland and India has been in force. Detailed financial information on all Indian residents with accounts in Swiss financial institutions has been provided to Indian tax authorities annually since September 2019.
Switzerland has also been actively sharing details about accounts of Indians suspected of engaging in financial wrongdoings based on prima facie evidence. Such exchanges of information have occurred in hundreds of cases.
Overview of Foreign Clients’ Funds in Swiss Banks
The overall funds of foreign clients, including institutions, declined to CHF 983 billion (over ₹ 92 lakh crore) in 2023, down from CHF 1.15 trillion at the end of 2022. In terms of assets, Indian clients accounted for CHF 1.46 million at the end of 2023, marking a 63% decline from the previous year and the lowest level in over two decades. This amount included dues from Indian customers worth about CHF 188 million, up from CHF 164 million at the end of 2022.
The United Kingdom ranked first in terms of foreign clients’ money in Swiss banks, with CHF 254 billion, followed by the United States (CHF 71 billion) in second place and France (CHF 64 billion) in third place. Other countries in the top 10 included the West Indies, Germany, Hong Kong, Singapore, Luxembourg, and Guernsey.
India’s ranking dropped to 67th place, down from 46th place at the end of 2022. Pakistan also saw a decline to CHF 286 million (from CHF 388 million), while Bangladesh experienced a sharp plunge from CHF 55 million to CHF 18 million.
Alleged Black Money in Swiss Banks
The issue of alleged black money in Swiss banks has been a politically contentious topic in both India and neighboring countries. However, Swiss authorities have consistently emphasized that assets held by Indian residents in Switzerland should not be automatically labeled as black money. They actively support India in combating tax fraud and evasion, as evidenced by the exchange of financial information between the two countries since 2018.
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