Indians have $2.3 billion in Swiss banks—or maybe it’s 600 times that

Show me the money.
Show me the money.
Image: Reuters/Fabrizio Bensch
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It feels like the finale of a long-running soap opera—the characters are Indian politicians and officials, and the cold, heartless vaults of Swiss banks.

A report from Zurich that said Swiss authorities were preparing a list of Indians with money in Swiss banks to be handed over to Indian authorities were carried prominently in today’s newspapers. The Special Investigation Team meant to penetrate Swiss secrecy and bring money launderers to book immediately swung into action, giving quotes to newspaper reporters.

An official spokesperson for Switzerland’s federal finance ministry has denied the reports, unmindful of the excitement in India. ”We don’t know what they are talking about,” he said.

The amount of money illegally stashed away in secret Swiss bank accounts has become an emotive issue in India in the last few years. People of wide ranging persuasions have spoken out against the issue, including the anti-corruption activist Anna Hazare, Yoga guru Baba Ramdev, politician Subramanian Swamy and criminal lawyer Ram Jethmalani.

Some of them have claimed that if black money stashed overseas is brought back, it can solve nearly all of India’s problems. This has wide resonance, as evidenced by numerous viral posts on social media that repeat these claims.

But nobody really knows how much money belonging to Indians are parked overseas, how much of it is illegal and how much of either is in Swiss banks.

Recently published data by the Swiss National Bank puts the amount held by Indian account holders in Swiss banks to Rs14,000 crore ($2.3 billion), an increase of 43% during 2013.

Various politicians and other groups have estimated the true value of black money stashed in Swiss accounts to be over $1 trillion.

Here is a rundown of the several estimates of the alleged black money over the years:

In an interview with Rediff in 2009, R. Vaidyanathan, a professor at the Indian Institute of Management in Bangalore, said the total amount of Indian money kept in Swiss banks to be $45 billion, based on the Global Financial Integrity study that said average amount of illicit outflows from India stood around $27.3 billion from 2002-2006.

A study in 2011 by the Bharatiya Janata Party, which has now been voted to power, estimated that around $250 billion was stashed away in various banks in Switzerland.

A news report in The Times of India in February 2012 quoted A.P. Singh, then director of the Central Bureau of Investigations, as saying that Indians hold funds worth $500 billion in tax havens with Switzerland as the most preferred destination of many tax evaders.

A white paper published by India’s finance ministry in May 2012, estimated deposits held by Indian nationals in Swiss banks at 1.94 billion Swiss francs ($2.1 billion) or Rs9,295 crore. In its report, the government mentions that from 2006, liabilities of Swiss banks towards Indians have declined.

The white paper also mentions a 2009 report, quoted in the press, that pegged the amount at $1.4 trillion. It was attributed to one Swiss Banking Association (SBA). It later became clear that such an organization did not exist. Another one by the same abbreviation, the Swiss Bankers Association, denied putting out any such report.