New Delhi: When Swiss banks are mentioned, the common perception is that they harbor “black money.” However, recent data reveals a more nuanced picture. Not all funds deposited in Swiss banks are illicit. Let’s delve into the details.
The Numbers Speak: A 70% Decline
The Central Bank of Switzerland has just released figures that highlight a significant trend: Indian deposits in Swiss banks have plummeted by a staggering 70%. The total now stands at a four-year low of ₹9,771 crore. In just four years, the money parked in Swiss banks has sharply declined, signaling a shift in investor behavior.
Indians Withdraw and Diversify
The decline isn’t merely about reduced deposits; it reflects a broader disillusionment with Swiss banks. Indians are no longer flocking to these institutions. Instead, they are diversifying their investments. Here’s how:
- Cash Deposits: The cash held in Indian bank accounts within Swiss banks has dwindled from ₹39.4 crore at the end of 2022 to ₹31 crore now.
- Other Bank Channels: Funds routed through other banks have also seen a decline. A year ago, this figure was ₹111 crore, but it now stands at ₹42.7 crore.
- Trusts and Fiduciaries: Trusts, which once held ₹2.4 crore, now retain only ₹1 crore.
- Investments Beyond Cash: Indians are exploring alternative avenues. They’ve invested ₹30.2 crore through bonds, securities, and other financial instruments.
Excluding Third-Country Entities
It’s essential to note that these figures exclude funds held by Indians or NRIs through third-country entities. The Swiss National Bank’s report reveals that the current total for Indian customers in Swiss banks is 103.98 crore Swiss francs. Of this, cash deposits account for 31 crore Swiss francs.
Historical Context
Back in 2006, Swiss banks held a record high of nearly 6.5 billion Swiss francs from Indian clients. Since then, the trend has been mostly downward, with occasional exceptions in 2011, 2013, 2017, 2020, and 2021.
In summary, the allure of Swiss banks seems to be waning for Indian depositors. As they seek better investment opportunities, the once-favored Swiss vaults are losing their appeal.
