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Indian money in Swiss banks has dropped to a 20-year low

By Madhura Karnik

Indians are perhaps becoming weary—or wary—of stashing their money in Swiss banks.

For long, Swiss banks have been considered a popular destination for illegal money. But the quantum of Indian deposits there had fallen to 1.2 billion Swiss Francs (Rs8,269 crore) in 2015. This is the lowest since 1996, the earliest year for which the Swiss National Bank (SNB), Switzerland’s central bank, released data on June 30.

SNB’s data, though, doesn’t indicate what share of such funds is illegal.

Here’s how the deposits have dropped in the last few years:

Swiss banks provide fortress-like security to customers, not divulging any of their details. This makes these banks a hot destination for everyone—from rich businessmen to the drug mafia.

The reason behind the drop in Indian money there is not yet clear, but for the past two years, the Narendra Modi government has been trying to clamp down on black money.

During his campaign for the 2014 general election, Modi had promised to bring back illegal wealth stashed abroad and distribute it among the country’s poor. His Bharatiya Janata Party had then estimated that some Rs85 lakh crore ($1.3 trillion) of funds were held in such accounts.

Within days of gaining power, prime minister Modi formed a special investigative team to repatriate such funds.

In 2015, it announced a three-month special window for people to declare their unaccounted for money. The government said if such money was found after the declaration period, it will impose huge penalties. Even then, only about Rs2,500 crore were collected in the period between July 2015 and September 2015.

Meanwhile, in Feb. 2015, an international investigation into Swiss banks named 1,195 Indians holding accounts with HSBC bank in Zurich. These funds totalled to Rs25,465.28 crore, and the list of account holders included big industrialists like Mukesh Ambani, India’s richest man, and his brother Anil Ambani, Jet Airways chairman Naresh Goyal, and Dabur’s Anand Chand Burman.