June 19, 2014


The funds, described by SNB as ‘liabilities’ of Swiss banks or ‘amounts due to’ their clients, are the official figures disclosed by the Swiss authorities and do not indicate towards the quantum of the much-debated alleged black money held by Indians in the safe havens of Switzerland.

Press Trust of India

Chairman Justice (retd) M.B. Shah and other SIT members come out after 
the first high level meeting. A data on Thursday said Indians’ money in 
Swiss banks has risen to nearly Rs 14,000 crore, despite a global 
clampdown against the famed secrecy wall of Switzerland banking system. 
File photo
Indians’ money in Swiss banks has risen to over two billion Swiss francs (nearly Rs 14,000 crore), despite a global clampdown against the famed secrecy wall of Switzerland banking system.

The funds held by Indians with banks in Switzerland rose by over 40 per cent during 2013, from about 1.42 billion Swiss francs at the end of previous year, as per the latest data released on Thursday by the country’s central banking authority Swiss National Bank (SNB).

In contrast, the money held in Swiss banks by their foreign clients from across the world continued to decline and stood at a record low of 1.32 trillion Swiss francs (about $1.56 trillion or over Rs 90 lakh crore) at the end of 2013.

During 2012, the Indians’ money in Swiss banks had fallen by over one-third to a record low level.

The total Indian money held in Swiss banks included 1.95 billion Swiss francs held directly by Indian individuals and entities, and another 77.3 million Swiss francs through ’fiduciaries’ or wealth managers at the end of 2013.

The latest data from Zurich-based SNB comes at a time when Switzerland is facing growing pressure from India and many other countries to share foreign client details, while its own lawmakers are resisting such measures.

India has also constituted a Special Investigation Team (SIT) to probe cases of alleged black money of Indians, including funds stashed abroad in places like Switzerland.

The funds, described by SNB as ‘liabilities’ of Swiss banks or ‘amounts due to’ their clients, are the official figures disclosed by the Swiss authorities and do not indicate towards the quantum of the much-debated alleged black money held by Indians in the safe havens of Switzerland.

SNB’s official figures also do not include the money that Indians or others might have in Swiss banks in the names of entities from different countries.

The Swiss National Bank said that the focus of banks in the country continues to shift away from foreign clients to domestic business, as reflected in the decline in their overall amounts due to overseas customers.

There are a total of 283 banks in Switzerland, down from nearly 300 at the beginning of 2013. This include two banks (UBS and Credit Suisse) classified as big banks, while there are 93 foreign-controlled banks operating in the country. A total of close to 1.25 lakh staff work at these banks.

According to the SNB data, funds held by the US entities in Swiss banks also rose during 2013 -- from 189 billion Swiss francs to 193 billion Swiss francs -- despite a major crackdown by the American authorities against the Swiss banks.

However, a number of countries saw their exposure to Swiss banks decline during the year, resulting in the overall funds held by foreign clients in Switzerland’s banking institutions decline to 1.32 trillion Swiss francs, from 1.39 trillion Swiss francs at the end of 2012.

With regard to the money held by Indians in Swiss banks, it rose during 2013 after a sharp decline in 2012. Prior to that, Indian money in Swiss banks had risen during 2011 also.

The quantum of Indian funds in Swiss banks stood at a record high level of 6.5 billion Swiss francs at the end of 2006, but it declined by more than 4 billion Swiss francs after four straight years of fall till 2010.

For clients across the world, total funds in Swiss banks stood at a record high level of 2.9 trillion Swiss francs at the end of 2005, while the all-time high level in the US currency was recorded in 2007 at $2.4 trillion.

Amid allegations of Indians stashing huge amounts of illicit wealth abroad, including in Swiss banks, the Indian government has been saying that it was making various efforts to bring back the unaccounted money.

Keywords: Swiss bank account, Indian money in Swiss accounts, black money issue

For the past decade, especially after what are called the 9/11 wars, New Delhi has chosen to give up its own say on matters of the Middle East to the big powers, either piggybacking on their stands or being intimidated into adopting a hands-off policy there

By Suhasini Haidar
For a small group in the audience in Parliament, the omission seemed glaring. Yet, as President Pranab Mukherjee completed his address to the joint session of Parliament on June 9, outlining the policies of the new government, no one seemed to notice the unhappiness of the Ambassadors of the Middle East or West Asia and North African (WANA) and Gulf region who were special invitees. Unlike in the past, the presidential address made no mention of India’s ties with their region. Even last year, for example, Mr. Mukherjee had devoted a paragraph in his speech — on “supporting efforts to promote peaceful settlements of regional conflicts” in West Asia and political engagement with Africa. This year, the address focussed on the subcontinent and the big powers, the United States, Russia and China.

The omission is only a symptom of the larger lack of understanding in the Indian establishment of the value that lies in ties with West Asia; ties that have been slipping in the past few years. For India, the disinterest has been enhanced by the growing conflicts in the region, from Libya to Syria and Iraq. Every time a country in the region erupts, India seems less willing to engage with it. As a result, the only bilateral visit by Dr. Manmohan Singh in his tenure during UPA-II was to Saudi Arabia in 2010. In his schedule of engagements for the remainder of this year, Prime Minister Narendra Modi has made no mention of the region either.
Disproportionate with stakes

The gradual decline in India’s ties with the region is baffling. Even if you discount our obvious dependence on the region for oil — about 70 per cent of all oil imports, not to mention the bulk of trade that is conducted through this region via the Suez Canal, there is still the staggering fact — of the numbers of Indians employed in the countries there. Nearly seven million Indians now live and work in the Gulf and WANA, sending home about half of the $65 billion India earns in global remittances. These are Indians who will not be granted anything more than work permits, and their welfare will remain India’s responsibility. At seven million, this group of overseas workers is an integral part of India’s relations with the WANA-Gulf region, forming the equivalent of India’s “30th State,” with a population almost the equivalent of that of Himachal Pradesh and Uttarakhand.

The missing workers and stranded nurses of Tikrit and Mosul have now brought this community into the spotlight again, but the focus, as in the past, is fleeting. Indians working in these countries suffer, just as bilateral relations do, from a lack of interest by India. Activists say that everyday in the Gulf, two Indians commit suicide on an average. They work gruelling hours for unregulated agencies, being shipped around, as the construction workers were from the United Arab Emirates to Iraq, without India speaking up for them. And one part of the problem is that India’s voice doesn’t carry the weight it once did in the region.
Fading diplomatic stance

For the past decade, especially after what are called the 9/11 wars (Iraq and Afghanistan), India has chosen to give up its own say on matters of the Middle East to the big powers. On matters of conflict, Iraq, Syria, Libya, the government has chosen to piggyback on Russia and China’s stand at the United Nations, or to be intimidated by the U.S. and Europe into adopting a hands-off policy there.

Take the Libyan intervention for example. India went with Russia and China to abstain on the U.N. vote invoking the Right to Protect for strikes on Libya, but didn’t raise its voice against the U.S. and the European Union (EU) countries that turned that mandate into a licence for regime change and the ultimate removal of Col. Qadhafi. It isn’t as if India did not have stakes in Libya: thousands of doctors, teachers, engineers and construction workers worked there, and India hoped for a share of Libya’s “sweet crude” in due course. As India’s influence and goodwill was enough at the time it was one of the few countries that was allowed landing rights to evacuate its citizens by air, and Qadhafi permitted an Indian warship to enter Tripoli’s waters; even Chinese and Russian ships were made to stay in international waters. Even so, as the situation deteriorated — today, it’s anarchy — India has been absent in voicing any concerns for a country it once had a special relationship with.

On Syria too, India has followed a perilously confused path, voting with the U.S. and the EU against the Assad regime on a Security Council vote that Russia and China eventually vetoed, but then turning around against the West on others. With each successive flip-flop voting at the U.N. and the UNHRC, (two for, three against, three abstentions), India’s voice has lost its timbre. More significantly, India never vocally opposed the U.S. Congress’ approval for the Obama administration’s decision to fund and arm Syrian rebels, despite the fact that non-interference in a sovereign state is a principle of India’s foreign policy, not to mention the bitter lessons India had to learn after a similar funding of Taliban rebels in Afghanistan.

The U.S.’ argument that it would fund only moderate groups was simply unworkable, given that the Syrian Opposition is wholly controlled by jihadi and al-Qaeda affiliated militant groups. It is these groups of the Islamic State in Iraq and the Levant (ISIS/ISIL) that are today seeking to carve out an Islamist state from Iraq and Syria, and beginning a chilling offensive by overrunning the towns of Tikrit and Mosul last week, slaughtering soldiers on the way. India, with more than 15,000 nationals working there, hundreds of whom face real danger, has been left a bystander to the frightening pace of events there.

Engaging the GCC

Another reason for this is that India has restricted dialogue on the issues of Libya, Syria and Iraq and others to its conversations with the two most powerful ‘influencers’ in the region: the U.S. and Russia. However, given that it is Arab-Persian rivalries that are playing out more than Cold War ones, it is imperative that the new government finds ways of initiating dialogue on West Asian conflicts with the GCC (Gulf Cooperation Council), mainly Saudi Arabia and with Iran as well.

Once India shows its intent to engage, officials will find that their voice is heard very quickly. As any Indian traveller to the region will tell you, India occupies a very high place in these countries, dating back from the civilisational ties it shared with Egypt, Syria and Mesopotamia (Iraq). From Cairo to Baghdad, vendors still have a “special discount” for visitors from Al-Hind; in Syria, mention of India invokes talk about the old Damascus-Bombay trade routes, and in Tripoli, before the air strikes in 2011, there was a building covered with a poster of pictures of Pandit Nehru and Indira Gandhi. That goodwill has only been enhanced by the diligent and disciplined Indian expatriate, who is now an influential figure in many a Gulf and WANA country. Engaging with these countries and with its own population there will put India back on the pedestal it once occupied. For a start, as Mr. Modi criss-crosses over to South America in July, and then to the U.S. in September, he may want to rediscover those old ties with a stopover somewhere in the region, and in the process, for India to rediscover its voice there.