Winning Bizness Desk

Mumbai. According to the Swiss National Bank (SNB) data released on June 19, 2024, the money deposited by Indians in Swiss banks has tripled from 1.04 billion Swiss Francs (₹11,000 crore) in 2023 to 3.5 billion Swiss Francs (₹37,600 crore) in 2024. This is the highest since 2021, when deposits stood at ₹41,000 crore. The surge has reignited debates over black money. Let’s break it down.

Where Did This Money Come From?

The funds belong to Indian individuals and companies, but the major increase is driven by banks, financial institutions, bonds, and securities. Personal account deposits rose by only 11%, amounting to 346 crore Swiss Francs (₹3,675 crore), just 10% of the total. The rest stems from corporate and institutional investments, reflecting a recovery from a 70% drop in 2023, which had been a four-year low.

Why Choose Swiss Banks?

Indian banks and firms turn to Swiss accounts for four reasons: ease of international trade, better returns from bonds and securities, Switzerland’s stable banking system, and foreign exchange management. Swiss banks are globally renowned for their strict privacy, with accounts identified as “numbered accounts,” ensuring the account holder’s identity remains confidential.

Is It All Black Money?

Swiss authorities and Indian government assert that not all funds are black money. SNB data reflects bank liabilities, not illicit wealth. It excludes deposits made via third-country entities. Swiss banks cooperate with India to combat tax evasion and fraud, strengthening the case for legitimate investments.

Government Actions and Scrutiny

India and Switzerland have an Automatic Exchange of Information (AEOI) agreement since 2018, under which details of Swiss accounts are shared with India, as seen in 2019 and 2020. The Indian government regularly seeks information from Swiss authorities to detect tax evasion or illegal funds, ensuring vigilance against black money.

Cause for Concern?

Deposits in Swiss banks aren’t inherently wrong. They can be part of legitimate business investments, foreign trade, or financial activities. However, any illegal funds warrant investigation. While Swiss banks’ privacy and security make them attractive, India’s proactive measures keep potential black money in check.