Indian money in Swiss banks down 80% since 2014, says FM Piyush Goyal

The finance minister cited Swiss ambassador's letter, which also said the Indian money in Swiss banks have decreased by 80 per cent since 2014.

Under fire for reports of a spurt in black money held by Indians in Swiss banks, Finance Minister Piyush Goyal said on Tuesday such money decreased by around 35 per cent in 2017 year-on-year, and by 80 per cent since the Narendra Modi government took over in 2014.

“After the NDA came to power in 2014, deposits in Swiss banks have been reduced by 80 per cent till the end of 2017,” Goyal said in the Rajya Sabha.

Citing data from the global body of central banks, the Bank for International Settlements (BIS), Goyal refuted reports of a 50 per cent rise in deposits of Indians, quoting the Swiss National Bank (SNB). The Central Board of Direct Taxes (CBDT) under the Ministry of Finance clarified that the Swiss National Bank’s data was usually misinterpreted because it included non-deposit liabilities, businesses of Swiss branches located in India, inter-bank transactions and fiduciary liabilities.

Goyal said the government had sought 4,000 pieces of information from Swiss banks and, depending upon the data it received, the government would take action.

Non-banks deposits fell to $524 million in 2017 compared to $800 million in 2016 and $2,234 million in 2014.

The CBDT also furnished a letter from Swiss ambassador to India Andreas Baum. The letter pointed out that assets held by Indian residents in Switzerland could not be considered as “black money”.

“More often than not, the media reports have not taken account of the way the figures have to be interpreted, which has resulted in misleading headlines and analyses. Moreover, it is frequently assumed that any assets held by Indian residents in Switzerland are undeclared (so-called ‘Black Money’),” the letter by Baum said. 

He said that the right data to identify Indian deposits are published by the BIS, which collects locational banking statistics (LBS) in collaboration with the SNB.

LBS measure international banking activity from a residence perspective, focusing on the location of banking office and captures around 95 per cent of all cross-border banking activity. “The liabilities in the form of loans and deposits of Swiss-domiciled banks towards Indian non-banks decreased by 44% between 2016 and 2017,” the letter by Baum added.

During the Question Hour in the Rajya Sabha on Tuesday, Trinamool Congress member Sukhendu Sekhar Roy left Goyal not only searching for answers on a question related to the deposits of Indian nationals having purportedly increased in Swiss banks, but also forced Chairman M Venkaiah Naidu to adjourn the House in the middle of the Question Hour when Trinamool Congress members entered the well of the House to protest the FM’s reply.

Before Roy stood up to ask a supplementary question on the subject, Goyal had replied to Indian National Lok Dal member Ram Kumar Kashyap’s questions on the subject. Several Opposition members wanted to know when people would receive the Rs 1.5 million in their bank accounts from the black money deposited in Swiss banks that Prime Minister Narendra Modi had promised.

Goyal ignored the catcalls, but Roy’s question riled him. Roy pointed to India having signed several agreements with Switzerland in more than two decades. He said the Double Taxation Avoidance Agreement was executed on December 29, 1994, and subsequent protocols and agreements were signed in 2011 and 2018.

“So, for the past 24 years or so, the Agreements are being executed. I want a specific reply from the minister that how much unaccounted deposit of Indians have so far been recovered from Switzerland, in how many cases prosecution proceeding has been initiated and when the citizens of India will get Rs 1.5 million in their accounts,” Roy asked. The Trinamool MP’s question led to much mirth among Opposition members, who applauded Roy’s question by thumping their tables.

The FM said Roy “may have some information which the government does not have. If he is privy to any information about black money, I think he should put it before the government so that the government can take action”.

This led to protests from Opposition members, particularly from Roy’s colleagues in the Trinamool Congress. The Chair also advised the FM to “answer the question”. Roy said the minister was casting aspersions.

As Goyal began his answer, Trinamool Congress members trooped into the Well of the House, shouting slogans “kala dhan wapas lao” (bring back black money). As Trinamool MPs raised slogans, the Chairman adjourned the House at 12.35 pm.