Delhi Diary: Swiss Banks And Indian Money

By Shakir Husain Bernama’s correspondent in New Delhi, Shakir Husain shares his take on the happenings in India. NEW DELHI, July 2 (Bernama) -- No discussion of high-level corruption in India is complete without mentioning Swiss banks. Negative perceptions abound in India about the Swiss banking system. So it wasn't surprising that government and opposition politicians traded barbs last week after the latest Swiss figures showed that funds held by Indian citizens and companies in the European banking haven rose more than 50 per cent to 70 billion rupees (about US$1 billion or 1.01 billion Swiss francs). The rise in 2017 deposits came after three years of decline amid a government crackdown on suspected "black money" or unaccounted wealth. The Indian media, citing Swiss National Bank data, also reported that Pakistani money held in Switzerland was about 1.12 billion Swiss francs, suggesting that corruption in the neighborhood was a bigger problem. Those parking their money in Switzerland include non-resident Indian (NRI) businessmen, India-based industrialists, politicians or those with too much unaccounted cash. There is a history why a Swiss money connection is considered a reputation risk in the country. In the past, key figures involved in some of India's high-profile scandals were believed to have held secret accounts in Switzerland. Whether a Swiss account is legal or illegal, in India it is bound to raise suspicions about the owner. Finance Minister Piyush Goyal wondered how all of the Indian funds can be assumed to be black money. He said India will start getting details of bank accounts from Switzerland under a bilateral treaty and action will be taken against anyone found guilty of wrongdoing. "We will have all information. If someone is found guilty, the government will take strong action against them," Goyal said. Of course, opposition leaders were quick to seize the opportunity to ask questions about the sharp rise in Indian funds in the Swiss banking system known for its secrecy laws. Congress president Rahul Gandhi mocked Prime Minister Narendra Modi, saying he promised in the 2014 election year that he would bring back "black money" held abroad and put 1.5 million rupees in each Indian bank account. Bahujan Samaj Party (BSP) leader Mayawati, who champions the cause of Dalits and the poor, asked: "Will the Modi government accept its failure in bringing back black money?" She asked what was Indian money doing in Swiss banks. It is easy to ask such questions because of Switzerland's global reputation as a magnet for money belonging to dictators and tax evaders. Switzerland's cloak of banking secrecy was dealt a big blow in 2015 when a whistleblower leaked details from thousands of accounts at HSBC's Swiss unit. The account holders included drug cartels, arms dealers, tax dodgers and fugitive diamond traders. The client list also had 1,195 wealthy Indians, according to published reports. It is estimated that the actual amount stashed away by Indians in offshore havens and undeclared foreign assets could be hundreds of billions of dollars. Washington-based think-tank Global Financial Integrity says illicit financial outflows are a massive problem for India. Its research found that India lost about $343 billion to illicit outflows between 2002 and 2011. -- BERNAMA