Why Indians Are Parking More Money in Swiss Banks: The Full Story

Indian money held in Swiss banks has seen a significant surge, more than tripling to 3.54 billion Swiss francs (around ₹37,600 crore) in 2024. This marks the highest level since 2021, according to data released by the Swiss National Bank (SNB) on June 19. 

This substantial increase comes after a sharp 70% drop in 2023, making the current rise a notable rebound. 

Where Did the Money Come From? 

Most of this increase didn't come from individual customer accounts directly. Instead, the majority of funds were held through bank channels and other financial entities. Direct deposits from Indian customers saw a more modest rise of 11%, representing only about one-tenth of the total. 

The total amount reflects all liabilities of Swiss banks towards Indian clients, including significant holdings through other banks, fiduciaries, and financial instruments. 

Do People Really Keep "Black Money" in Swiss Banks? 

The topic of Indian money in Swiss banks often brings up discussions about "black money." However, Swiss officials have consistently clarified that these funds cannot automatically be labelled as illicit. 

For the wealthy, Swiss banks offer several legitimate advantages. They serve as a safe haven during times of political unrest or currency crises, providing stability. A relatively stable currency shields money from market volatility. 

Additionally, Swiss trust laws are considered excellent for pooling and protecting family wealth, especially for families with members spread globally. Access to exclusive investment opportunities is another privilege. Swiss authorities also emphasise their active support to India in fighting tax fraud and evasion. 

Increased Transparency and Data Sharing 

Since 2018, Switzerland has been sharing annual financial details of Indian residents with India under an automatic exchange of information agreement. Regular information sharing, including on suspicious accounts, has continued, with "hundreds of cases" exchanged so far.    

Conclusion 

This latest surge in Indian funds in Swiss banks, coupled with increased data sharing, paints a more nuanced picture of financial connections between India and Switzerland. It highlights that while vigilance against illicit funds continues, legitimate reasons also contribute to these holdings. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.