By Vartika Savarna
The first major decision taken by the newly formed NDA Government was to form the SIT which is supposed to be working towards the retrieval of the huge amount of black money stashed in the Swiss Bank accounts. The SIT led by Justice M B Shah has already asked the Swiss banks to hand over the list of names of Indian citizens who have stashed their money abroad in a move to evade tax or to hide their illegaly earned money. Our finance minister Mr. Arun Jaitely had personally looked over this matter and hence the Government has already got hold of a few names who have allegedly kept their money in Swiss accounts. The Indian Government sure looks like it will take strict actions against such individuals and hopes to bring these thousands of crores of black money back to India to support our economy.
The estimated amount of Indian currency currently being held in Swiss banks is around Rs 14,000 crore.
The above given amount is indeed huge! But what makes people (not just Indians) run to Swiss banks? It is infact known that everytime a person needs to put away a large sum of money, hide it from the government or otherwise they always rush to a Swiss bank. A recent example is from the widely acclaimed movie “Wolf of the Wall Street” where Leonardo Di Caprio’s character deposits huge amount of his illegaly earned money in Swiss bank accounts to keep them away from the Federal Police. So why Switzerland?
Switzerland is one of the most prosperous nations of Europe. The population isn’t high but the per capita GDP is one of the highest among European nations. The Swiss Franc (their currency) is also a very stable currency. It has been estimated that about 136,000 people in Switzerland are bank employees while Swiss banks also employ about 103,000 people abroad. What has hugely helped this country’s bank sector to grow and flourish has been its neutrality and sovereignty. “I’m Switzerland”, Bella had said explaining her neutrality towards werewolves and vampires in Stephanie Meyer’s most famous work Eclipse. There probably couldn’t have been a better example to prove its neutrality! If we see the current figures almost one-third of all the offshore funds of most of the nations are stashed in Swiss banks.
Swiss banks follow a Banking privacy under the Banking Law of 1934. This is probably the singular biggest reason for all the black money being kept at the Swiss banks. This law prevents the banks from revealing the names of the account holders in the respective banks. Along with this, there is another sort of “numbered” bank accounts that provide even more privacy, because the knowledge of such accounts is strictly kept to the senior officials and is not known by the other bank employees. This law can be overridden only under certain special circumstances such as then when it is absolutely essential in a criminal investigation.
It is obviously due to the above reasons that there have been continuous allegations of black money being held in Swiss bank accounts. Jullian Assange,the Editor-in-Chief of WikiLeaks confirmed these reports further adding that most of such accounts are held by US, Britain, Germany, Austria and Asian nationals. With such allegations turning every government’s head towards Switzerland, there have been changes in the Banking Privacy Acts. This has been accompanied by decrease in the foreign currencies kept at the Swiss Banks.
This has also obviously led to more people turning to other banks such as that of Singapore. Singapore too in order to lure clients has made Banking secrecy laws more stringent.
An article in The Times of India dated 13th July, 2014 is titled “Manhattan Condos are the new Swiss Bank accounts” also speaks of how “New York City’s luxury apartments are the latest stats” since “proving foreign corruption in real estate purchases is hard and very rare”.
Though we are seeing such changing trends still it remains true that even today people consider Switzerland as a safe haven for all those who need to hoard their black money away from public and government’s eyes.