The deposits of Indian clients in the Swiss banking system rose just south of 50% year on year, to CHF 3.828 billion (₹30,945 crores) in 2021 from Swiss francs (CHF) 2.552 billion (₹20,627 crores) in 2020, data released by the Swiss National Bank - the central bank of Switzerland, on Thursday shows.
One CHF is trading at ₹80.83 per unit.
These deposits have been released as 'total liabilities' with Indian clients in the Swiss banking system, as deposits made by Indian clients (or by a customer in banking) appears as liability in the books of the bank, according to the data.
The largest component of these deposits fall under the label 'all other liabilities', which takes the form bonds, securities and financial instruments. It stood at CHF 2.001 billion in 2021, up from CHF 1.664 billion
Further, CHF 602,027 were owed to customers, while CHF 1.225 billion were owed to banks in 2021.
After a two-year shrinkage, for 2018 and 2019, the total liabilities increased 186% - nearly tripling - CHF 2.552 billion in 2020, and then another 50% to 3.828 billion in 2021.
The total liabilities include deposits from:
Branches of Swiss banks in India have also been included. Credit Suisse and UBS are among the Swiss banks that operate in India, according to data from the Reserve Bank of India.
However, it does not include any deposits that Indian may be holding with these banks through third party entities, or through third party countries.
Is this black money?
Black money has been a locally politicised issue in India, with Swiss banks being seen as a haven where Indian stash their fortunes that are unaccounted for.
This money in turn, called 'black money', is linked to corruption in India.
Fortunes that were unaccounted for were also a target of Prime Minister Narendra Modi while campaigning to come to power in the run up to the Lok Sabha election in 2014.
In a reply to Rajya Sabha last August, the Ministry of Finance has elaborated against using data from the Swiss National Bank on approximating the quantum of black money - or deposits in general - against when the data for 2020 was released. The statement referenced media reports showing the 186% jump from 2019 to 2020, as mentioned earlier in this story.
"Further, in respect of these media reports, the Swiss authorities have recently, inter alia, conveyed that customer deposits held with Swiss banks are not necessarily located in Switzerland. Thus, the Swiss National Bank (SNB) annual banking statistics should not be used for analysing deposits held in Switzerland by residents of India", the response by Pankaj Chaudhari, Minister of State for Finance, to Anil Desai of the Shiv Sena, states. It can be read here.
In a separate response to Lok Sabha, Chaudhari said that the government had no estimates on the black money held in Swiss banks for the last ten years. This can be read here.
Similarly in 2018, when this data was released, Swiss authorities addressed Indian media reports assuming that this data indicated India's holdings of 'black money' in Swiss banks. It stated that for the first time, Swiss authorities would be handing over information on Indian residents with accounts in a Swiss financial institution to India; an exercise that would be carried every year thereafter.
"Accordingly, assets held by Indian residents in Switzerland cannot be considered as 'Black Money'", the release says emphatically.
Find the data here.
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