What are the Swiss Bank Accounts and How Do they Work?
Recently, a report was issued regarding the amount deposited in Swiss banks, which stated that the highest amount of money in the banks is deposited by is British nationals.
What are the Swiss Bank Accounts?
According to the Swiss National Bank (SNB) report, in the year 2018, 26 percent of the total deposits was from British businessmen.
There is a gradual decline in the number of Indian deposits. As of now India stands at 74 in the list of highest number of people deposited wealth in different Swiss banks.
Last year, the deposits in these banks from Indian nationals dropped by six per cent when India ranked at 73.
The share of Indians in Swiss banks is 0.07 percent. Among the top five countries that hold money in Swiss banks, America holds the top positions.
The list is followed by West Indies, France and Hong Kong. The share of these five countries is more than 50 percent of the total deposits there.
How to Deposit Money in Swiss Banks?
Anyone over 18 years of age can open an account in Swiss Bank. However, if the bank suspects that the person making the deposit is doing so for a particular political purpose or the money being deposited is illegal, then the bank can reject the application. There are about 400 banks in Switzerland, in which UBS and Credis Suisse are the largest.
Accounts which are kept confidential are called ‘Numbered accounts’. Information related to the account holder is tagged with the account number, instead of the name.
And only a few people in the bank know who owns the account. But these accounts are not easily available. To escape legal hassles, people prefer not to take the bank’s credit or debit card or check facility.
Liberalised Remittance Scheme
The government is of the thought that it’s unfair to deem entire amount deposited as black money. In the report of the Swiss National Bank, this money has been shown as liability towards its customers, so it is not clear how much black money is there from. Liberalized Remittance Scheme (LRS) may be a major reason behind this.
In the first three years of Modi Government, Indians’ money in Swiss banks was continuously decreasing. But for the first time in the fourth year, this amount suddenly increased to 50 percent.
This was the fastest increase in 13 years. In 2004, Indians’ money in Swiss banks increased by 56 percent.
In fact, depositing money abroad is just permissible under Liberalized Remittance Scheme. The scheme started on February 4, 2014 during the tenure of former finance minister P Chidambaram. At that time only 25 thousand dollars were allowed carry with your foreign visit.
It may be possible that a large portion of the deposit in the Swiss National Bank was deposited under the liberalized Remittance Scheme.
Is The Entire Desposit in Swiss Bank an Evasion?
In the previous government, Finance Minister Piyush Goyal believed that more than 40 percent of the money could be deposited under this scheme. Some similar ideas were expressed by Finance Minister Arun Jaitley who had said that all the money in Swiss banks can’t be labelled as evasion.
These official figures are issued annually by the Central Bank of Switzerland. It is often alleged that people of India and other countries deposit their illegal earnings to Swiss banks, which are considered as safe havens to avoid tax.
Banks in Switzerland are called Swiss banks. Under the Swiss Banking Act (1934), the bank does not disclose the information of its account holders without their permission.
Indio-Swiss Pack to Share Account Holder’s Info
In addition, if the account holder is involved in financial irregularities but not in Switzerland, then the bank can’t ask for any information about his client from the bank. If bankers leaks information of any account they can be fined up to 50,000 francs, in addition to a six-month imprisonment.
So far, Switzerland has disclosed more than a dozen Indian names who have suspected to stash up wealth in Swiss banks.
Earlier, notice was issued to 14 persons before sharing their information to Indian authorities. As per the law in the country, notices are issued to account holders to allow them appeal against sharing information to the Indian government.