Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Finance Ministry refutes media reports of an increase in deposits in Swiss banks

Certain reports have appeared in the media on 18.06.2021 stating that funds of Indians in Swiss Banks have risen to over Rs 20,700 crore (CHF 2.55 billion) at the end of 2020 from Rs 6,625 crore (CHF 899 million) at the end of 2019, reversing a 2-year declining trend. It has also been stated that this is also the highest figure of deposits in the last 13 years.

It is pertinent to point out that India and Switzerland are signatories to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC) and both countries have also signed the Multilateral Competent Authority Agreement (MCAA) pursuant to which, the Automatic Exchange of Information (AEOI) is activated between the two countries for sharing of financial account information annually for calendar year 2018 onwards.

Finance Ministry while refusing media reports said, "Media reports allude to the fact that the figures reported are official figures reported by banks to Swiss National Bank (SNB) and do not indicate the quantum of much-debated alleged black money held by Indians in Switzerland. Further, these statistics do not include the money that Indians, NRIs or others might have in Swiss banks in the names of third-country entities".

"Exchanges of Financial Account information in respect of residents of each country have taken place between both countries in 2019 as well as 2020. In view of the existing legal arrangement for exchange of information of financial accounts (which has a significant deterrent effect on tax evasion through undisclosed assets abroad), there does not appear to be any significant possibility of the increase of deposits in the Swiss banks which is out of undeclared incomes of Indian residents", Finance Ministry added.

Further, the ministry mentioned the following factors that could potentially explain the increase in deposits:

  • Increase in the deposits held by Indian companies in Switzerland owing to increased business transactions
  • Increase in deposits owing to the business of Swiss Bank branches located in India
  • Increase in Interbank transactions between Swiss and Indian Banks
  • A capital increase for a subsidiary of a Swiss Company in India and
  • Increase in the liabilities connected with the outstanding derivative financial instruments

TaxGyata Team

TaxGyata Team

Leave a comment