Swiss Bank Indians Fund 2025

Swiss Bank Indians Fund 2025

Why in News Swiss Bank Indians Fund 2025? 

Recently, the Swiss National Bank shared new data showing Indian funds in Swiss banks rose sharply in 2024. The total crossed ₹37,000 crore, most of it came from institutions and banks.

Key Findings on Indian Funds in Swiss Banks Report 2024

The Swiss National Bank (SNB) released its annual data on June 19, 2025, revealing a sharp increase in funds linked to Indian clients held in Swiss banks. 

• • Total Funds: As per the latest SNB data, the total amount linked to Indian clients in Swiss banks stood at CHF 3.545 billion by the end of 2024. In Indian currency, this is approximately ₹37,600 crore. 
    • This is a major increase when compared to CHF 1.04 billion in 2023, showing more than a threefold rise within a year. 
    • It marks one of the highest levels seen since 2021, when the figure had briefly peaked.

• Individual Deposits: Although the total value jumped significantly, only a small share belongs to individuals. The amount directly deposited by Indian individuals rose to CHF 346 million in 2024, which is about ₹3,675 crore. This is just 10% of the total funds.

• Institutional and Corporate Channels: The larger portion of the funds held in Swiss banks under Indian names is routed through banks, corporations, trusts, and investment structures. This part made up over CHF 3.2 billion, nearly 90% of the total. 

• India’s Global Rank: In the 2024 report, India ranked 48th in the list of countries with the highest funds in Swiss banks. In the previous year (2023), India held the 67th position.

Historical Trends of Indian Funds in Swiss Banks

• Before 2006: In the early 2000s, many people from different countries, including India, saw them as a safe place to park their wealth. By 2006, the total Indian-linked funds in Swiss banks had touched a record high of CHF 6.5 billion, according to Swiss National Bank data.

• 2007 to 2010: After 2006, global financial authorities started pushing for greater transparency in banking systems. Switzerland came under scrutiny, especially after the 2008 financial crisis, which exposed several issues of tax evasion and illegal wealth. Between 2007 and 2010, funds from India began falling steadily. By 2010, the amount had decreased sharply.

• 2014 to 2018: From 2014 onwards, the Indian government increased efforts to uncover offshore wealth. Agreements with Switzerland were signed, these changes created fear among those holding unreported funds abroad. As a result, by 2017, the total amount had dropped to CHF 1.2 billion.

• 2020 to 2021: In 2020, during the COVID-19 pandemic, there was an unexpected increase in Indian funds in Swiss banks, reaching around CHF 2.5 billion. In 2021, this number further rose to CHF 2.55 billion.

What is a Swiss Bank?

• A Swiss bank refers to a financial institution that is legally based and operates under the banking regulations of Switzerland. 
• This bank is widely recognized for its strong security systems, customer-focused services, and a long-standing tradition of banking secrecy. 
• The roots of Swiss banking go back to the 17th century, when merchants and wealthy individuals started storing their wealth in Switzerland. 
• In 1713, the Great Council of Geneva introduced one of the world’s earliest banking confidentiality rules. These early laws laid the foundation for Switzerland’s strong reputation in protecting client identity.
• A major turning point came in 1998, when two major Swiss financial institutions — the Union Bank of Switzerland and the Swiss Bank Corporation — merged to form UBS Group AG. 
  • This new entity quickly became one of the largest and most well-known banks globally – “Swiss Bank”.
• Swiss Banking Law of 1934 was introduced during a time of political uncertainty across Europe and made it a criminal offense for bankers to disclose client information without consent. 
• During the 2008 global financial crisis, many Swiss banks stayed strong.
• Swiss banks have adapted and are now part of the Automatic Exchange of Information (AEOI) system, sharing data with over 100 countries since 2018. 
• These banks play a major role in international finance, gold storage, and global payment handling. 

Why People Choose Swiss Banks in Global Finance?

• Financial Trust:

• • • Switzerland has maintained a position of political neutrality for a very long time. During both World Wars, the country stayed out of direct conflict. 
    • This neutral stand protected its financial institutions and made them appear safe and stable to outsiders.

• Strict Privacy Laws:

• • • One of the most well-known features of Swiss banks is the privacy they offer. For decades, client identity and account details were considered protected secrets. 
    • The 1934 banking law made it a criminal offense to reveal client data without proper legal procedure. 

• Financial Stability:

• • • Switzerland’s economy is known for its low inflation, strong currency, and well-managed central bank policies. 
    • These factors create a healthy financial environment. Swiss banks, particularly giants like UBS and Credit Suisse, are known for conservative risk strategies. 

• Transparency:

• • In recent years, global pressure from organizations like the OECD, G20, and agreements such as FATCA (Foreign Account Tax Compliance Act) led Swiss banks to become more transparent. 
  • Since 2018, Switzerland allows countries to share banking data of foreign clients to prevent tax evasion.

Legal vs. Illegal Funds: The Black Money Debate

The discussion around Indian funds in Swiss banks often sparks one major question — how much of it is legal and how much could be black money? 

• Not all Indian money in Swiss banks is illegal. In fact, a large part of the funds belong to companies, banks, and legal financial institutions. 
• For example, according to Swiss National Bank (SNB) data released in June 2025, Indian-linked funds in Swiss banks stood at CHF 3.545 billion at the end of 2024. But only CHF 346 million, about 10%, were in personal accounts.
• Certain patterns may alert authorities. If large sums are held in secret accounts under names of shell companies, or if the fund movement is not supported by business documents, it creates doubt. 
• In some past cases, Indian authorities discovered undeclared accounts in Switzerland through leaked data or whistleblower reports, such as the HSBC Geneva list in 2011. These incidents created a strong public perception of black money in Swiss banks.
• Since 2018, under an agreement, Switzerland now shares details of Indian account holders with the Indian tax department. 
  • As part of this agreement, the Central Board of Direct Taxes (CBDT) receives annual data about Indian residents holding Swiss accounts.

Steps Taken by Indian Government to Curb Tax Evasion

• Automatic Exchange of Financial Information: One of the biggest steps India took was joining the Automatic Exchange of Information (AEOI) framework. This system makes it harder for individuals to hide undeclared wealth abroad.

• Signing Tax Treaties: India has revised many of its old tax treaties and signed new ones to ensure better cooperation in tracking financial transactions. For example, the Double Taxation Avoidance Agreement (DTAA) with Switzerland was modified in 2011 to include stronger information-sharing clauses. 

• Black Money (Undisclosed Foreign Income and Assets) Act, 2015: To strengthen its domestic legal system, the Indian government passed a dedicated law called the Black Money Act in 2015. 

• • • A person found holding undisclosed foreign assets may face a fine that is three times the owed tax, along with the possibility of being jailed for up to ten years.
    • This act also introduced a one-time compliance window in 2015, where individuals could declare unaccounted foreign assets by paying tax and penalty.

• Operation Clean Money: After the note ban in 2016, the government began Operation Clean Money in 2017 to closely review unusual cash deposits. The Income Tax Department used data analytics and artificial intelligence to identify mismatches in financial declarations. This helped detect suspicious patterns and brought many hidden accounts.

• Public Awareness: The topic of black money became a central theme in Indian politics, especially around 2014. 

• • • To investigate unaccounted wealth held abroad, the Supreme Court directed the formation of a Special Investigation Team focused on black money-related matters.
• This team has recommended several steps, including better coordination between agencies and international cooperation, which are being gradually implemented.