How black money finally reaches Swiss banks?

Whenever there is talk of black money, then there is definitely mention of Swiss banks or Swiss banks. And when it comes to Indians' money in Swiss banks, our interest skyrockets.

The money of Indians deposited in Swiss banks was falling for three years but in the year 2017 the story has turned. Comparing on a year-on-year basis, Indian money in Swiss banks has increased by 50 percent to 1.01 billion Swiss francs (about seven thousand crore rupees) last year. 

These figures have been released by the Swiss National Bank, so there is little room for doubt. According to the figures released by the Central Bank of Switzerland (SNB), the money of all foreign customers in Swiss banks increased by 3 percent in the year 2017 to 1.46 lakh crore Swiss francs or about 100 lakh crore rupees.

This news can give tension to the Modi government as it has been promising to target black money since coming to power. Apart from this, those who give any information about those who keep money in Swiss banks, the government has been talking about benefiting them too.


Indian money in Swiss banks

According to Bloomberg, the year 2016 brought relief for the Modi government as the money of Indians in Swiss banks had decreased by 45 percent this year. Switzerland has been reporting these figures since 1987, and in the case of India, the fall in 2016 was the biggest. But recent figures have raised new concerns.

According to the SNB, the money held by Indians in Swiss banks has increased to Rs 3200 crores, personally deposited by other banks to Rs 1050 crores and Rs 2640 crores in the form of securities.

At the end of 2006, the money of Indians in Swiss banks was 23 thousand crores, but in the last decade it has decreased significantly.

Obviously, amidst these huge figures, two questions can definitely arise in the mind. First, why do most people choose Switzerland and its banks to deposit black money and second, how does this black money reach Swiss banks?

Why is money deposited in Swiss banks?


The answer to the first question is that the Swiss banks keep a lot of confidentiality about their customers and their deposits, due to which they are their first choice.

The Swiss bank or its employees appear in James Bond or other Hollywood films with a certain degree of secrecy. He does all the work from a computer device hidden in a black suit and briefcase.

In real life, Swiss banks operate like regular banks, plus the secrecy that comes with their affairs makes them special. Strict confidentiality rules for Swiss banks are nothing new.

And these banks have hidden these secrets for the last three hundred years. In the year 1713, the Great Council of Geneva made rules under which banks were asked to keep registers or information of their clients.

 Swiss Bank and Secret


But the same rule also states that information from customers will not be shared with anyone other than the City Council. In Switzerland, if a banker gives information related to his customer to anyone, then it is a crime.

These same confidentiality rules make Switzerland a safe haven for black money. It was not a long time ago when these banks did not ask any question on depositing money, gold, jewellery, painting or any other valuables.

However, due to rising cases of terrorism, corruption and tax evasion, Switzerland is now turning down requests for accounts that are suspected to be illegal.

Apart from this, he has also started looking into requests from India or other countries to share information which provide evidence that the money deposited by such person is illegal.

How is money accumulated?


Now the second question, how does black money reach Swiss banks? For this it is important to know that how to open an account in Swiss banks?

Anyone above the age of 18 years can open an account in a Swiss bank.

However, if the bank suspects that the person making the deposit is doing so for a specific political purpose or the money being deposited is illegal, then it can reject the application.

According to Business Standard, there are about 400 banks in Switzerland, of which UBS and Credis Suisse Group are the largest, and they both account for more than half of all banks' balance sheets.

And which accounts get the most privacy? These are called 'numbered accounts'. All the things related to this account are based on the account number, no names are taken.


There are only a few people in the bank who know whose bank account belongs to whom. But these accounts are not easily available.

It is said that those who do not want to be caught, do not take credit or debit cards or check facilities of the bank.

Apart from this, if you have an account in these banks and you want to close it, then it can be done anytime, that too without any cost.