Over the last ten years, the amount of money Indians hold in Swiss banks has changed dramatically due to geopolitical events. This is evident from the recent report by The Swiss National Bank (SNB), which indicates that an Indian customer’s direct deposits increased over time. There have been rumors claiming that Indian-linked funds have surged; however, Swiss banks claim this data lacks relevance when focused on actual user deposits.
Decline With Increased International Scrutiny
Amidst rampant speculation regarding Swiss bank accounts for Indians, Indians had roughly 425 million Swiss francs deposited in around 123 participating branches in 2015. By mid-2024, this figure dropped further to approximately 346 million Montreal Swiss francs as authorities cracked down on offshore account scams, evasion of taxes, and stricter scrutiny over un-taxed fund flats. Attempts made by the government of India, such as automatic information exchange agreements, placed a focus on exposing unrealized wealth stored in out-of-country funds, thus gradually reducing unattended funds parked in these accounts during holidays.
Short-term Fluctuations: Pandemic Peak and Recent Recovery
Despite the persistent decline over the last decade, some patterns of short-term variation can be identified. Swiss bank deposits from India surged during the COVID-19 pandemic to a ten-year high of roughly 602 million Swiss francs. This was likely due to global economic uncertainty along with capital movement. Following this, however, there was a steep drop in deposits down to 309 million Swiss francs by 2023. In 2024, there was modest recovery, with estimates projecting it rising to 346 million Swiss francs. However, these numbers still reflect acute underlying decline.
Global Context: Other Countries Have a Similar Experience
India’s experience is not singular, as some other advanced economies are also witnessing a downward trend in the deposit accounts held in Swiss banks over the past decade. For instance, UK citizens’ deposits decreased from 44 billion to 31 billion Swiss francs, and American nationals also witnessed a dramatic 62% decrease from 64.2 billion to 24.4 billion Swiss francs. Among India’s neighboring countries, Pakistan and Bangladesh saw their deposits decreasing by almost 75% and 73%. This reflects international attempts aimed towards reducing tax evasion activities coupled with financial transparency across borders.
Evolving Trends of Indian Wealth in Swiss Banks
There is a difference between direct customer deposits with Swiss banks and total Indian-linked funds. Although direct deposits have decreased, direct customer deposit figures only account for one-tenth of the total Indian-linked funds. This shift represents a combination of increasing channel bank regulation compliance alongside overarching shifts within the international finance ecosystem.”
