Swiss banks report 70% plunge in Indian deposits

Deposits made by Indian entities and individuals in Swiss banks, along with their local branches and various financial institutions, plummeted by 70% last year to a four-year low of 1.04 billion Swiss Francs (about $1.17 billion, or ₹9,771 crore), the Press Trust of India reported, citing annual data released by Switzerland’s central bank.

After reaching a 14-year peak of CHF 3.83 billion in 2021, Indian clients’ funds in Swiss banks fell for a second year, primarily on significant drops in bonds, securities, and other financial instruments. Funds in customer deposit accounts and other Indian bank branches also decreased sharply, the data showed.

To be sure, the data from the Swiss National Bank (SNB) reflect the total, not specifically the speculated black money held by Indians in Switzerland, and exclude funds held through third-country entities.

By the end of 2023, the SNB reported CHF 1,039.8 million in total liabilities to Indian clients, including CHF 310 million in deposits, CHF 427 million via other banks, CHF 10 million through fiduciaries, and CHF 302 million in various financial instruments, the PTI report said.

Historically, the total deposits had peaked at nearly 6.5 billion Swiss francs in 2006 and has mostly declined, with occasional increases, according to data on SNB.

The four components all fell in 2019, but 2020 saw a steep decline in deposits, whereas 2021 experienced a surge in all categories. Only the fiduciaries segment increased in 2022.

SNB data encompasses all Indian customer funds at Swiss banks, including those at branches in India and non-deposit liabilities.

Swiss authorities have asserted in the past that the holdings do not constitute ‘black money,’ and that they actively collaborate with India to combat tax fraud and evasion.

Since 2018, Switzerland and India have exchanged tax information automatically, providing details on Indian account holders annually to Indian tax officials, beginning September 2019.

Switzerland also shares account information for Indians suspected of financial misconduct upon sufficient initial evidence, with hundreds of such exchanges to date.

The UK led foreign deposits in Swiss banks with CHF 254 billion, followed by the US and France.

India ranked 67th, down from 46th the previous year, while Pakistan and Bangladesh also saw declines in their Swiss bank deposits.