Second year in a row, Indian funds in Swiss banks rise; at 14 year high in 2021

MONEY PARKED by Indians in Swiss Banks jumped to a 14-year high of Swiss francs (CHF)3.83 billion in 2021, on the back of rise in holdings and customer deposits.

Money in Swiss Bank

• Money parked by Indians had declined in 2018 and 2019, but has since picked up.
• Marking the second straight year of rise, aggregate funds by Indians increased from 2.55 billion Swiss francs in 2020.
• The CHF 3,831.91 million of 'total liabilities' of Swiss banks or amounts due to their Indian clients as of 2021-end included CHF 602.03 million in customer deposits (up from CHF 504 million at 2020-end), CHF 1,225 million held via other banks(up from CHF383 million), and CHF 3 million through fiduciaries or trusts (up from CHF 2 million).
• The highest component of CHF 2,002 million (up from CHF 1,665 million) was 'other amounts due to customers in the form of bonds, securities and various other financial instruments.
• The total amount stood at a record high of nearly 6.5 billion Swiss francs in 2006, after which it mostly declined, except for a few years including in 2011, 2013, 2017, 2020 and now in 2021.

Sharing of Data

• India and Switzerland had, for automatic sharing of financial account information, inked a Joint Declaration on November 22, 2016, for activation of AEOl in tax matters between the two nations.
• The use and disclosure of the information received is governed by the confidentiality provisions of the India-Switzerland tax treaty.
• AS PART of a tax information exchange pact between India and Switzerland, financial information on Indian residents with accounts in Swiss financial institutions since 2018 is shared with India.

Prelims Takeaway

• Tax Havens and their policy
• Financial instruments