Money Parked by Indians In Swiss Banks Rise 50%, Govt Says Not Black Money

Money Parked by Indians In Swiss Banks Rise 50%, Govt Says Not Black Money
Representative Image

The Modi government's much-trumpeted crackdown on black money has just taken a big hit. According to the official annual data of the Swiss National Bank (SNB), the central banking authority of the Alpine nation, money parked by Indians in Swiss banks rose over 50 per cent to Swiss Francs (CHF) 1.01 billion (Rs 7,000 crore) in 2017.

In comparison, the total funds held by all foreign clients of Swiss banks rose about 3 per cent to CHF 1.46 trillion, or about Rs 100 lakh crore, as per the data released yesterday.

The surge in Indian money held with Swiss banks comes as a surprise given India's continuing clampdown on suspected black money stashed abroad, including in banks of Switzerland that used to be known for their famed secrecy walls for years.

The revelations created a furore in political circles with Opposition leaders taking a swipe at the Narendra Modi-led government over the rise in Indian money in Swiss banks.

Finance Minister Piyush Goyal said all deposits by Indians in Swiss bank not black money

The government explained that all the deposits by Indians in Swiss bank accounts cannot be termed black money and action will be taken against persons parking illegal funds overseas after Switzerland starts sharing real-time account details from January onwards.

The government also said all the money in Swiss banks should not be termed illegal as past investigations by tax department (CBDT) have shown that it includes funds held by persons of Indian origin who now hold foreign passport, monies belonging to non-resident Indians, as also funds belonging to resident Indians who have made legitimate investments abroad, including transfer of money under the Liberalised Remittance Scheme (LRS). “A news item has appeared today indicating an increase of money by ‘Indians’ in the Swiss banking system.

“The data that you alluded to will come to us, so how are you assuming that this is black money or this is illegal transaction,” finance minister Piyush Goyal said, replying to questions from journalists about a reported 50% increase in Indian deposits in Swiss banks in 2017.

The data became a political bone of contention as Congress president Rahul Gandhi, in a Twitter post, mocked the National Democratic Alliance (NDA) government’s approach towards black money since 2014.

“2014, He (Narendra Modi) said: I will bring back all the ‘black’ money in Swiss banks...2016, He said: Demonetisation will cure India of ‘black’ money. 2018, He says: 50% jump in Swiss bank deposits by Indians, is ‘white’ money. No ‘black’ in Swiss banks!” Gandhi tweeted.

Union Minister Arun Jaitley, in a blog on Friday, also explained that it would be unwise to assume that all Swiss bank deposits are illicit money.

“To assume that all the deposits are per se tax evaded money or that Switzerland in the matter of illegal deposits is what it was decades ago, is to start on a shaky presumption,” Jaitley wrote.

Finance minister Goyal cited a bilateral treaty between India and Switzerland to highlight that there would be automatic exchange of information on Indian accounts in Swiss banks from 2019. Goyal assured strong action against those found guilty of stashing black money in Swiss banks.

The financial information will be from January 2018, while the reported surge in bank deposits pertains to 2017.