Funds abroad: Rich Indians stashed large chunk of black money
RICH Indians and companies hold about $2.5bn in Swiss accounts, according to a report quoting the Swiss central bank, amid anger in India about the stashing of illicit funds abroad. Walter Meier, spokesman for the Swiss National Bank, said Indian deposits stood at 1.95bn Swiss francs ($2.5bn) at the end of 2010. The sum included $2.1bn in savings and deposits by individuals, financial institutions and companies. The remaining $400m represented deposits in Swiss accounts held by wealth managers on behalf of Indian clients. India's Supreme Court earlier this month ordered a probe into undeclared money in foreign bank accounts, while accusing the government of "serious lapses" in handling the issue. Opposition parties have been quick to pick up on public anger over the so-called "black money" issue, accusing the Congress-led government of seeking to cover up the scale of the problem. The issue of so-called "black money" - funds not reported to the government for tax purposes or parked abroad to avoid tax - is one of the latest problems to engulf Prime Minister Dr Manmohan Singh's administration. Indians had moved out some $500m from Swiss banks since 2008, according to the Swiss central bank's figures, While the Swiss bank did not reveal the reasons behind the flight of money, Indian regulatory officials believe Indians may be moving funds to harder-to-trace accounts in places such as Singapore and Dubai. Meier said the vast majority of deposits from India were held in two of Switzerland's biggest banks, UBS and Credit Suisse. The US-based think-tank Global Financial Integrity last November estimated that from 2004 to 2008, India lost $19bn per year in illicit financial flows out of the country. Last year, India said a tax pact signed with Switzerland should help the government track illicit Indian funds in Swiss bank accounts but finance minister Pranab Mukherjee said the measure would not be retroactive.
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