Swiss deposits saw 80 per cent dip, says FinMin

New Delhi: The Union finance ministry, on Tuesday, claimed that deposits by Indians in Swiss banks fell by 34.5 per cent in 2017 and by 80 per cent since the Narendra Modi government came to power in 2014 based on “internationally accepted source” Bureau of International Settlements.

This, finance ministry said, was revealed in a letter it received from Swiss embassy on the issue of black money.

The government had been under political pressure after media reports in June had quoted Swiss National Bank, the country’s central bank that money parked by Indians in Swiss banks rose by over 50 per cent to CHF 1.01 billion (Rs 7,000 crore) in 2017.

This had hurt the government politically as it has tried to build a public perception that it had been tough on the issue of black money and had taken various measure to curb it including the ill-advised demonetisation in November 2016.

The finance ministry on Tuesday maintained that this data by SNB is usually misinterpreted as it included: non-deposit liabilities, business of Swiss branches located in India, inter-bank transactions and fiduciary liability.

“The figures published by the SNB are regularly mentioned in the Indian media as a reliable indicator of the amount of assets held with Swiss financial institutions in respect of Indian residents. More often than not, the media reports have not taken account of the way the figures have to be interpreted, which has resulted in misleading headlines and analyses,” said the ministry.  

Moreover, the statement said it is frequently assumed that any assets held by Indian residents in Switzerland are stash.

The finance ministry said that in his letter Swiss ambassador Andreas Baum pointed out that “the right data to identify Indian residents’ deposits in Switzerland is published by the Bank of International Settlements (BIS) which collects Locational Banking Statistics (LBS) in collaboration with Swiss National Bank (SNB).”

It said that LBS measures international banking activity from a residence perspective, focusing on the location of banking office and it captures around 95 per cent of all cross-border banking activity.

“Data from BIS shows non-bank loans and deposits (which really constitute the individual and corporate deposits used as black money haven in the past and exclude inter bank transactions) have fallen by 34.5 per cent in 2017 compared to 2016 ($524 million in 2017 vs $800 million in 2016),” said the finance ministry.

It said that Swiss non-bank loans and deposits have reduced by a significant 80.2 per cent under NDA government between 2013 and 2017.  

“This broadly corresponds SNB reports which show an 82 per cent reduction in total Indian customer deposits in Switzerland since 2013, though BIS data is the right way to measure actual deposits from India in Switzerland,” it said.