Indian money in Swiss banks rise for first time in 5 years

The total funds held by Indian individuals and entities include 2025 billion Swiss francs held directly by them and 158 million held through 39fiduciaries39 or wealth managers shows the latest data disclosed by the Swiss National Bank SNB in its annual handbook on Swiss banks published on Thursday The funds described by SNB as 39liabilities39 of Swiss banks towards their clients from India are the official figures disclosed by the Swiss authorities and do not indicate towards the quantum of the muchdebated alleged black money held by Indians in the safe havens of Switzerland Also SNB39s official figures do not include the money that Indians or other nationals might have in Swiss banks in the names of others While there is no official estimate for such unaccounted funds but some estimates put it as high as 2025 billion As per the data from SNB Switzerland39s central bank the quantum of funds held by Indians in Swiss banks had last increased in 2006 by about one billion Swiss francs to 65 billion Swiss francs over Rs 40000 crore but fell to less than onethird by the end of 2010 It rose by about Rs 3500 crore in 2011 In a White Paper on black money tabled in Parliament in May the Indian government had also mentioned that the total liabilities of Swiss banks towards Indians have been coming down since 2006 and fell by more than Rs 14000 crore during the 20062010 period The liabilities stood at Rs 9295 crore at the end of 2010 compared to Rs 23373 crore in 2006 Amid allegations of Indians stashing huge amounts of illicit wealth abroad including in Swiss banks the government says it is making various efforts to bring back the unaccounted money The White Paper said that quotSwitzerland has agreed to share information prospectively only and has accepted limited retrospectively only in case of some countries such as Indiaquot As per SNB data funds held by Indians directly in the Swiss banks increased by about 370 million Swiss francs to 2025 billion Swiss francs Rs 11800 crore in 2011 On the other hand the funds held through 39fiduciaries39 nearly halved to 158 million Swiss francs about Rs 900 crore in 2011 marking the fifth straight year of decline Fiduciaries are essentially wealth fund managers who hold the money of Indian private holders and families in the socalled numbered accounts The Swiss banks39 direct liabilities towards clients from India include funds held in savings and deposit accounts by Indian individuals financial institutions and corporates In terms of liabilities through fiduciary accounts the UK tops the list with 61 billion Swiss francs followed by Saudi Arabia39s 595 billion Swiss francs while Pakistan is also placed higher than India with 355 million Swiss francs On the other hand the size of Swiss banks39 assets in India also increased about two billion Swiss francs to 64 billion Swiss francs over Rs 37000 crore in 2011 Their assets have been continuously increasing since 2006 and have more than doubled in this period The experts have been saying that there has been a quotperceptible flight of fundsquot of Indian holders from Swiss banks to other places in the recent years The foreign capitalfriendly regulations in places like Mauritius and Dubai were possibly being exploited by those seeking to move their funds away from Swiss banks which have come under strict scrutiny of late At the same time the global pressure has been rising on Switzerland to ask its banks to share information about their clients with foreign governments It is being suspected now that Indians having illicit wealth in Swiss banks may be moving their funds in fear of being exposed due to growing scrutiny At the same time even those having legitimate funds in Swiss banks may be moving away due to a growing level of negativity attached to them Top financial regulators SEBI and RBI have already stepped up their vigil over Indian entities routing their funds from secretly held Swiss bank accounts to India through other locations It is feared that the money might be routed back to India either into the stock market through FIIs or even via the FDI route u00a0