Black money: $2.5 billion stashed in Swiss banks by Indian clients

GENEVA: The Swiss National Bank, the central bank of Switzerland, has estimated that Indian clients had deposits of about $2.5 billion in banks in the European nation in 2010. 

This is just a fraction of the $1.5-trillion figure that had been projected by political parties and non-governmental organizations, who have attacked the UPA government with their anti-corruption movement over the last few months. 

"The Swiss National Bank can only say that liabilities of Swiss banks towards Indian holders according to our annual statistics... were Swiss francs 1.9 billion ($2.5 billion) in 2010," Walter Meier , spokesperson for the Swiss National Bank's president, said. 

According to him, the liabilities of Swiss banks towards Indian holders were Swiss francs 1.965 billion ($2.7 billion) in 2009 and Swiss francs 2.4 billion (about $3 billion) in 2008. In the aftermath of the financial crisis that engulfed the West after the collapse of the Lehman Bank in the US in 2008, Swiss private banks, particularly their largest bank UBS, had suffered huge losses. Subsequently, there were substantial withdrawals of funds from Swiss banks. 

Unconfirmed reports suggested that several Indian companies and private holders had also moved funds from Switzerland to Singapore following the financial crisis in 2008. Moreover, several legal cases were filed against Swiss banks, especially UBS, for parking funds by wealthy US citizens through tax evasion. 

In addition, the banks came under growing international pressure from the Paris-based Organisation for Economic Cooperation and Development and faced tougher G-20 financial regulations. 

All these forced the Swiss government to considerably relax its confidentiality provisions of numbered accounts that provided the extreme forms of client confidentiality until two years ago. After the OECD reported a list 
of such "uncooperative" countries as Switzerland, Luxembourg, Austria and Liechtenstein, among others, to the G-20, there was a panic reaction.(ET)