Foreign Clients Move Rs 25 Lakh Cr Away From Swiss Banks in Last 6 Years

The quantum of Indian funds in Swiss banks stood at a record high level of 6.5 billion Swiss francs at the end of 2006, but it declined by more than 4 billion Swiss francs after four straight years of fall till 2010.

SNB's official figures, however, does not include the money that Indians or others might have in Swiss banks in the names of entities from different countries.

India has also constituted a Special Investigation Team (SIT) to probe cases of alleged black money of Indians, including funds stashed abroad in places like Switzerland.

As per the PwC study, "the tax assessment of cross-border clients that resulted from the international demand for more tax transparency certainly accounts for a large part of the net new money outflows (worth 350 billion Swiss francs)."

"However, net new money outflows in association with the settlement of the tax situation are not that serious for a bank since it is quite possible that concerned clients remain clients of the bank.

"Moreover, this is a one-time effect and could even have a positive impact in the future. This is because, following the settlement of the tax situation, some cross-border clients will bring their money back to Switzerland, as it will then be possible to use it without any restriction," PwC said.

The consultancy said that the Swiss private banking has faced enormous challenges since 2008, but "the banks will be able to attract net new money if they succeed in bringing regularised assets back to Switzerland by emphasising their high-quality service and strong performance.

"After all, clients with tax-compliant assets are much more demanding than clients with untaxed assets. And if Swiss politicians pull the banks out of the international crossfire and manage to create unfettered access to the EU market, Swiss private banking will once again generate positive headlines."

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