Money in Swiss banks: India at 77th place, accounts for just 0.06% of all foreign funds

India has moved down three places to 77th rank in terms of money parked by its citizens and enterprises with Swiss banks at the end of 2019, while the UK has retained its top position, as per the latest data from Switzerland's central bank.

India was ranked 74th in the previous year.

An analysis of the latest annual banking statistics released by the Swiss National Bank (SNB) showed that India remains ranked very low when it comes to money parked by Indian individuals and enterprises in Swiss banks, including through their India-based branches, accounting for just about 0.06 per cent of the aggregate funds parked by all foreign clients of Switzerland-based banks.

In comparison, the top-ranked UK accounted for close to 27 per cent of the total foreign funds parked with Swiss banks at the end of 2019.

According to the latest SNB data, funds parked by Indian individuals and enterprises in Swiss banks, including through India-based branches, fell by 5.8 per cent in 2019 to 899 million Swiss francs (Rs 6,625 crore).

The data is for 'total liabilities' of Swiss banks towards Indian clients takes into account all types of funds of Indian customers at Swiss banks, including deposits from individuals, banks and enterprises. This also includes data for branches of Swiss banks in India, as well as non-deposit liabilities.

These are official figures reported by banks to the SNB and do not indicate the quantum of the much-debated alleged black money held by Indians in Switzerland. These figures also do not include the money that Indians, NRIs or others might have in Swiss banks in names of third-country entities.

Among the top-ranked jurisdictions, the UK is followed by the US, West Indies, France and Hong Kong in the top five.

The top-five countries alone account for more than 50 per cent of the aggregate foreign funds parked with the Swiss banks, while the top-10 account for nearly two-thirds.

The top-15 countries account for nearly 75 per cent of all foreign money in Swiss banks, while the contribution of the top-30 is almost 90 per cent.

The top-10 countries also include Germany, Luxembourg, Bahamas, Singapore and Cayman Islands.

Only 22 jurisdictions have 1 per cent of more of the total foreign funds parked with Swiss banks and these include China, Jersey, Russia, Saudi Arabia, Australia, Panama, Italy, Cyprus, UAE, Netherlands, Japan and Guernsey.

Among the five-nation BRICS block of emerging economies, India is ranked the lowest while Russia is ranked the highest at the 20th place (same as last year), followed by China at 22nd (same as 2018-end), South Africa at 56th (up two places) and Brazil at 62nd (up from 65th last year) in terms of money parked by their citizens and enterprises at the end of 2019.

The countries ranked higher than India also include Kenya (74th), Mauritius (68th), New Zealand (67th), Venezuela (61st), Ukraine (58th), Philippines (51st), Malaysia (49th), Seychelles (45th), Indonesia (44th), South Korea (41st), Thailand (37th), Canada (36th), Israel (28th), Turkey (26th), Mexico (26th), Taiwan (24th), Saudi Arabia (19th), Australia (18th), Italy (16th), UAE (14th), Netherlands (13th), Japan (12th) and Guernsey (11th).

However, several of India's neighbouring nations are ranked lower, with Pakistan ranked 99th, Bangladesh 85th, Nepal 118th, Sri Lanka 148th, Myanmar 186th and Bhutan 196th. All these countries recorded decline in their figures for 2019.

A number of countries have seen their funds falling in Swiss banks in recent years amid a global clampdown against the erstwhile banking secrecy walls in the Alpine nation.

In terms of percentage change in the aggregate amount during 2019, Central African Republic saw the biggest increase of over 3,600 per cent, while Iraq and North Korea also figured among the top-ten countries in terms of rise in their figures of nearly 500 per cent and 110 per cent, respectively. The decline was highest for Maldives at over 97 per cent.

It has been often alleged that Indians and other nationals seeking to stash their illicit wealth abroad use multiple layers of various jurisdictions, including tax havens, to shift the money to Swiss banks.

Also, with Switzerland putting in place an automatic information exchange framework with India and various other countries, the famed secrecy walls of Swiss banks are said to have crumbled. India started getting this automatic data last year, while it has already been getting information on accounts where proof of illicit funds can be furnished.

At the end of 2018, funds officially held by Indians with banks in Switzerland accounted for about 0.07 per cent of the total funds kept by all foreign clients in the Swiss banking system, almost the same as the level seen a year before that after a modest increase from 0.04 per cent in 2016.

India was placed at 75th position in 2015 and 61st in the year before, though it used to be among the top-50 countries in terms of holdings in Swiss banks till 2007. The country was ranked highest at 37th place in the year 2004.

The total money held in Swiss banks by foreign clients from across the world rose marginally to CHF 1.44 trillion in 2019.

In terms of individual countries, the UK continues to account for the largest chunk at about CHF 385 billion (up from CHF 372 billion a year ago), which accounts for nearly 27 per cent of the total foreign money with Swiss banks.

The US remains on the second position with an increase in its funds to USD 160 billion, accounting for over 11 per cent of all foreign funds.

India was ranked in the top-50 continuously between 1996 and 2007, but its rank started declining after that -- 55th in 2008, 59th in 2009 and 2010 each, 55th again in 2011, 71st in 2012 and then to 58th in 2013.