swiss bank

Chalgenius News | Indians funds in Swiss banks rise to over ₹20,000 crore, customer deposits down for second year

The increase in aggregate funds of Indian clients with Swiss banks, from 899 million Swiss francs ( 6,625 crore) at the end of 2019, reverses a two-year declining trend and has taken the figure to the highest level in 13 years.

Funds parked by Indian individuals and firms in Swiss banks, including through India-based branches and other financial institutions, jumped to 2.55 billion Swiss francs (over 20,700 crore) in 2020 on a sharp surge in holdings via securities and similar instruments, though customer deposits fell, annual data from Switzerland’s central bank showed on Thursday.

The increase in aggregate funds of Indian clients with Swiss banks, from 899 million Swiss francs ( 6,625 crore) at the end of 2019, reverses a two-year declining trend and has taken the figure to the highest level in 13 years.

It stood at a record high of nearly 6.5 billion Swiss francs in 2006, after which it has been mostly on a downward path, except for a few years including in 2011, 2013 and 2017, as per the Swiss National Bank (SNB) data.

The total amount of CHF 2,554.7 million ( 20,706 crore), described by the SNB as ‘total liabilities’ of Swiss banks or ‘amounts due to’ their Indian clients at the end of 2020, included CHF 503.9 million (over 4,000 crore) in customer deposits, CHF 383 million (over 3,100 crore) held via other banks, CHF 2 million ( 16.5 crore) through fiduciaries or trusts and the highest component of CHF 1,664.8 million (nearly 13,500 crore) as ‘other amounts due to customers’ in form of bonds, securities and various other financial instruments.

While the funds classified as ‘customer account deposits’ have actually declined from CHF 550 million at the end of 2019 and those through fiduciaries also more than halved from CHF 7.4 million, the money held via other banks rose sharply from CHF 88 million in this period.

However, the biggest difference has been a surge in ‘other amounts due to customers’ from India, which rose over six times from CHF 253 million at 2019-end.

All four components had declined during 2019.

These are official figures reported by banks to the SNB and do not indicate the quantum of the much-debated alleged black money held by Indians in Switzerland.

These figures also do not include the money that Indians, NRIs or others might have in Swiss banks in names of third-country entities.

According to the SNB, its data for ‘total liabilities’ of Swiss banks towards Indian clients takes into account all types of funds of Indian customers at Swiss banks, including deposits from individuals, banks and enterprises. This includes data for branches of Swiss banks in India, as also non-deposit liabilities.

On the other hand, the ‘locational banking statistics’ of the Bank for International Settlement (BIS), which have been described in the past by Indian and Swiss authorities as a more reliable measure for deposits by Indian individuals in Swiss banks, show an increase of nearly 39 per cent during 2020 in such funds to USD 125.9 million ( 932 crore).

This figure takes into account deposits as well as loans of Indian non-bank clients of Swiss-domiciled banks and had shown an increase of 7 per cent in 2019, after declining by 11 per cent in 2018 and by 44 per cent in 2017.

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