In a significant development, the latest data released by the Swiss National Bank has revealed that the deposits of Indian customers in Swiss banks have declined by approximately 18 percent over the past decade. This trend reflects a substantial shift in the investment behavior of Indian individuals and corporations, as they appear to be moving their assets away from the traditionally secretive Swiss banking system.
The data, which covers the period from 2011 to 2021, shows a steady decline in the total value of Indian deposits held in Swiss banks. In 2011, the total value of Indian deposits stood at 6.5 billion Swiss francs (approximately $7 billion), but by the end of 2021, this figure had dropped to 5.3 billion Swiss francs (around $5.5 billion), a decrease of nearly 18 percent.
Experts attribute this decline to a combination of factors, including increased transparency and information-sharing between India and Switzerland, as well as India’s crackdown on black money and tax evasion. The Indian government’s efforts to repatriate undeclared wealth held by its citizens abroad have also played a significant role in the reduction of Indian deposits in Swiss banks.
Furthermore, the implementation of the Automatic Exchange of Information (AEOI) agreement between India and Switzerland, which came into effect in 2018, has made it more challenging for Indian account holders to maintain their anonymity and hide their assets. The AEOI agreement requires Swiss banks to share information about their clients’ accounts with the Indian tax authorities, thereby discouraging individuals from keeping their money in Switzerland.
The decline in Indian deposits in Swiss banks is part of a broader trend observed across various jurisdictions. Several countries, including India, have been pushing for greater transparency and information-sharing in the global financial system to combat tax evasion and illicit financial flows. This has led to a decrease in the appeal of traditional tax havens, as individuals and corporations seek to comply with stricter regulations and disclosure requirements.
The reduction in Indian deposits in Swiss banks is seen as a positive development by the Indian government, as it aligns with their efforts to curb black money and ensure tax compliance. However, experts caution that there is still more work to be done to fully address the issue of undeclared wealth and ensure that all assets held by Indian citizens are properly accounted for and taxed.
