Swiss banks owe Indian holders over USD 2bn:Swiss Central Bank

Geneva, July 16 (PTI) Swiss Central Bank estimates the
total liabilities of Swiss banks towards Indian holders at
about USD 2.5 billion in 2010 as against projections of about
USD 1.5 trillion by political parties and non-governmental
organisations.
"The Swiss National Bank can only say that liabilities of
Swiss banks towards Indian holders according to our annual
statistics... were Swiss francs 1.945 billion [USD 2.5
billion] in 2010," Walter Meier, the spokesperson for the
Swiss National Bank President, told PTI.
He said the liabilities of the Swiss banks towards Indian
holders were Swiss francs 1.965 billion (USD 2.7 billion) in
2009 and Swiss francs 2.4 billion (about USD 3 billion) in
2008.
In the aftermath of the financial crisis that engulfed
the West after the the collapse of the Lehman Bank in the
United States in 2008, Swiss private banks, particularly
their largest bank UBS, had suffered huge losses.
Subsequently, there were substantial withdrawals of funds
from Swiss banks.
Several legal cases against Swiss banks, especially UBS,
for parking funds by wealthy US citizens through tax evasion,
as well as growing international pressure from the Paris-based
OECD (Organisation for Economic Cooperation and Development)
and the G-20 financial regulation forced the Swiss government
to considerably relax its confidentiality provisions of
numbered accounts.
In an attempt to ward off possible censure by the G-20
leaders, the Swiss government has gradually relaxed its
banking secrecy laws that provided the extreme forms of client
confidentiality until two years ago.
Following the Paris-based Organisation for Economic
Cooperation and Development's (OECD) report about a list of
"uncooperative" countries such as Switzerland, Luxembourg,
Austria and Liechtenstein among others to the G-20, there was
a panic reaction.
The OECD formulated a set of strong rules and standards
to curb banking secrecy laws in the offshore tax havens that
include the Isle of Man, Hong Kong, and Singapore along with
Switzerland, Liechtenstein Monaco, Austria and Andorra.
Unconfirmed reports suggested that several Indian
companies and private holders have moved funds from
Switzerland to Singapore following the financial crisis in
2008.
But the recent trends suggest that Switzerland continues
to attract funds on a huge scale. The Swiss franc and its
banks are now in robust health even as other industrialised
countries are drowned in unprecedented fiscal crises.
"The strengthening of the Swiss frank against all major
currencies over the last one year is a clear sign that funds
are coming back to the Swiss banks," said an Indian banker in
Geneva, preferring anonymity.
Walter Meir said the Swiss government is holding
negotiations with the governments on the proposal of having a
"withholding tax" on assets held by foreign entities in Swiss
banks, suggesting that he doesn't have any information about
India looking at a similar arrangement.