Swiss banks owe Indian holders over $2.5 bn: Swiss Central Bank

GENEVA: The Swiss Central Bank has estimated the total liabilities of Swiss banks toward Indian accout holders at about $2.5 billion in 2010 as against the $1.5 trillion figure projected by some political parties and non-governmental organisations.

“The Swiss National Bank can only say that liabilities of Swiss banks toward Indian holders according to our annual statistics... were Swiss francs 1.945 billion ($2.5 billion) in 2010,” the spokesperson for the Swiss National Bank President, Walter Meier, said. He said the liabilities of the Swiss banks toward Indian account holders was 1.965 billion Swiss francs ($2.7 billion) in 2009 and 2.4 billion Swiss francs (about $3 billion) in 2008.

In the aftermath of the financial crisis that engulfed the West after the collapse of Lehman Bank in the US in 2008, Swiss private banks, particularly largest bank UBS, had suffered huge losses. Subsequently, there were substantial withdrawals of funds from Swiss banks. Several legal cases against Swiss banks, especially UBS, for parking funds illegally subscribed by wealthy US citizens through tax evasion, as well as growing international pressure from the Paris-based OECD (Organisation for Economic Cooperation and Development) and G-20 financial regulations forced the Swiss government to considerably relax confidentiality provisions for numbered accounts.

Unconfirmed reports suggested that several Indian companies and private holders have moved funds from Switzerland to Singapore following the financial crisis in 2008. But the recent trends suggest that Switzerland continues to attract funds on a huge scale.

The Swiss franc and its banks are now in robust health even as other industrialised countries are drowned in unprecedented fiscal crises. "The strengthening of the Swiss frank against all major currencies over the last one year is a clear sign that funds are coming back to the Swiss banks," said an Indian banker in Geneva, preferring anonymity.