Ministry of Finance rejects reports of Rs 20,700 Cr worth of black money held by Indians in Swiss banks

New Delhi: Refuting media reports of alleged black money held by Indians in Switzerland, the government said on Saturday that Swiss authorities had been asked to provide relevant facts as well as their views on possible reasons for the ‘increase/decrease in deposits.

Pointing out that some reports appeared in the media on June 18 indicating that Indian funds in Swiss banks reached over Rs 20,700 crore at the end of 2020 against Rs 6,625 crore at the end of 2019, thus reversing a two-year decline trend, the Ministry of Finance said it was also said to be the highest deposit figure in the past 13 years.

The finance ministry said media reports hinted that the reported figures are official figures reported by banks to the Swiss National Bank (SNB) and do not indicate the amount of allegedly highly controversial black money. held by Indians in Switzerland.

“In addition, these statistics do not include money that Indians, NRIs or others may have in Swiss banks on behalf of third country entities,” the ministry added in a statement.

Stating that client deposits have actually declined compared to the end of 2019, the finance ministry said funds held through trustees also fell by more than half compared to the end of the same year.

Stressing that the largest increase was in “Other amounts owed by customers,” the finance ministry said these were bonds, securities and various other financial instruments.

The Ministry of Finance informed that India and Switzerland are signatories of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC), adding that the two countries have also signed the Multilateral Agreement between Competent Authorities (MCAA ) under which, Automatic Information Exchange (AEOI) is enabled for sharing financial account information every year from 2018.

Stressing that exchanges of information on financial accounts concerning residents of each country took place between the two parties in 2019 as well as in 2020, the finance ministry said there does not appear to be a significant possibility of ‘increase in deposits in Swiss banks, which is on undeclared income of Indian residents given the existing legal arrangements for the exchange of information on financial accounts.

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The Ministry of Finance further listed five factors, including the increase in deposits held by Indian companies in Switzerland due to the increase in business transactions and the increase in deposits due to the activity of the Bank’s branches. Switzerland located in India, which could potentially explain the increase in deposits.

The increase in interbank transactions between Swiss and Indian banks, a capital increase for a subsidiary of a Swiss company in India, and the increase in debts related to outstanding derivative financial instruments were other factors mentioned by the ministry.

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