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Is the Perception of Swiss Banks Holding Black Money Justified?

Is the Perception of Swiss Banks Holding Black Money Justified?

Why Swiss Bank is famous for Black Money?

by Anurag Tiwari

In the movie of James bond “The World Is Not Enough” it is said that can’t trust the Swiss bank account what’s the world gonna do if you can’t believe a Swiss banker don’t know what will happen to the world.

Why Swiss Bank is so famous?

There are many such movies in which Swiss employees have been gun pointed Then also they didn’t tell about the information The first thing is that why does the swiss bank be famous all over the world? And why do the most powerful people in India deposit money in the Swiss account What is the benefit of this and can I open a Swiss account from India What are the documents? and why numbered accounts are famous. We will discuss all these things in detail Before that let’s understand black money Any money whose source has been hidden from the government

is black money One source is hidden by doing illegal activities Such as betting, extortion, and smuggling, And the second by doing legal activities Like if a shopkeeper is selling things is not an illegal activity but if he is not giving bills by selling and assembling the money in the form of cash then it is black money In an ideal economy, the government must have a record of every transaction and whose record is not found is a black money black money can’t be used easily in the market for hiding and tuning it into white people uses different ways

the most famous one is depositing money in the Swiss account the word Swiss bank is not a single bank All the banks of Switzerland are known as swiss banks But due to some rules of Switzerland’s banks, its banks are famous all over the world In the year 1730 Switzerland government made a law That the bank will not share any details of its customer after that the capital geneva In France and other European countries, powerful people started depositing money in the swiss bank And from here starts a culture of silence and secrecy

It became very important for Swiss banks After this rule the flow of money from the outside Was proved to be very beneficial for this government After this in 1934 the Swiss govt. again passed a law ‘The Banking Act of 1934’ according to article 47 if any bank shares the details of its customer with any govt.

from all over the world or to any tax agency then it is a punishable offence even if the details are of criminal if anyone violet this punishment could be up to 5 years all over the world, this is a very strict banking law of that time and currently due to this Switzerland become an an attractive destination for the rich and powerful people because they don’t have to answer for their immense wealth not even to their govt.

the first choice of Osama bin Laden was the swiss bank I will tell you at last when the names of Indian celebrities come the speciality of the swiss bank was that it is a politically neutral Like if Pakistan had such type of bank India would have avoided depositing no matter how good the bank Switzerland has no enmity with anyone during the cold war when countries were bound to decide between the US and the soviet union At that time Switzerland was neutral During the second world war also, Switzerland select the path of neutrality

After 1951 there is no engagement in Switzerland in the war This is the biggest advantage for any country Let me tell you how At the time of World War those who thought that Hitler would attack us all these countries started depositing money in the Swiss account in the recently uncovered documents, we come to know that In 1944 the interior minister of Germany Heinrich Himmler Sent a special train under which contain thousand and corers of gold, jewellery and paintings which is been submitted to the vault of the swiss bank

 it is not always true that the depositor is always rich and powerful Most of the time people deposit here rather for privacy the counties which have an unstable govt. or whose banks are not credible with this, the currency of Switzerland Swiss Frank is one of the premium currencies of the world due to all these people trust comparatively more swizz banks and the Swiss bank is fully aware of this which is why countries such as G 20 or the OECD group made time to time pressure on the swiss govt.

to unloose the rules but the Swiss govt. ignored most of countries in fact, more strict rules were made that if any bank official gives outside the information then it is considered to be a punishable offence now let’s see

How to open account Swiss bank

how to open a Swiss bank account any person from all over the world can open an account in a swiss bank people like you and me can also open an account in the swiss bank from home But the only problem is that you must have a minimum of 1 million swiss frank maximum has no limit The minimum age must be 18 years

valid passport which has a validity of at least 6 months which this you also have to submit your resume That contains details about like your skills & where have you worked How have you received the funds that you will submit You have to give that details You can connect to anytime zone & language in Switzerland Every facility is available for an international customer Before it was a simple process, But there was a lot of international pressure on Switzerland And new money laundering laws were implemented

So it become comparatively more difficult than before to open a swiss bank account But even after all this More money started coming into the swiss bank after covid As I gave the example of world war Today Ukraine-Russia war is going on The same thing is happening Due to uncertainty, The people of Ukraine & Russia want to keep their money somewhere safe It has increased the demand for swiss bank When digitalisation was going around the world Then swiss bank opted for digitalised infrastructure And tried to connect users with a mobile payment system

According to the mobile payment survey of 2020 People in Switzerland used mobile payment system more than cash no matter how far ahead Switzerland is It is not in anyone’s capability to leave India behind in digitalization. The normal accounts in the swiss bank can be opened by anyone Even we can open it from India if we fulfil the minimum requirements But the swiss bank is famous for its numbered accounts That a/c where powerful & rich people put their money It’s not easy to open a numbered a/c You have to physically visit Switzerland Your privacy is taken care of in this numbered account Any powerful government in the world.

If the agreement of tax-related information exchange is not with Switzerland Then swiss bank won’t share any of your information no matter what This numbered a/c has a unique code instead of a name No one knows what’s going on in these accounts other than some of the people from the bank Normally if you have to send money to someone in India Then you need the person’s name, a/c no., IFSC code, branch, etc.

But for the numbered a/c of the swiss bank you have to share a number And everything will be done Only some officials of the bank have the details The rest of its details do not go to anyone In a numbered a/c, regulatory compliance, anti-money laundering, obligations are checked It’s not like anyone can deposit money here It has a proper verification And once your swiss bank a/c is opened, Then the customer’s privacy is the no.

1 priority of the swiss bank The computer of the swiss bank for numbered a/c Doesn’t even have the customer’s name No employee of the bank can see your identity If there is a cybercrime, Your name won’t come up The bank statement doesn’t contains the name of the swiss bank accounts holder It has only a number that is the basis of the whole account It is costly to run this numbered a/c Its annual charges are $300 If you live outside of Switzerland then the bank can charge you non-residential fees The swiss bank gives you a facility that,

If you want that the bank statement doesn’t reach your country Then it has that facility. As information can reach the govt. through bank statement But to not send the bank statement, you have to pay the fee In other banks, you have to pay extra fee for sending the bank statement But it is the opposite here A few years ago it was possible that, You could do international wired transfers only by using numbers But now it is not possible If you transfer money to a swiss no. a/c from outside of Switzerland.

Then the swiss bank has to share your identity with a foreign bank And when details were leaked in 1-2 cases Then this was stopped When you open a numbered a/c in a swiss bank You don’t even get a chequebook As the whole purpose of numbered a/c then will be ruined Trail of the transaction in your a/c can be caught So other than this swiss bank provides you with a traveller’s cheque That is issued by them In that, all the details & amount are already mentioned You just have to use it as a currency.

You might have heard in the news that, When a particular celebrity was investigated traveller’s cheque from the swiss bank was found For this traveller’s cheque bank take an extra 1% commission You can rent a safe deposit box in the swiss bank numbered a/c In which things can be kept A safe deposit box is always connected to the bank a/c Big people hide their precious things here Swiss bank provides a secret bank vault for special customers That are in underground bunkers That has storage facilities where people can hide gold, diamonds or any physical items.

Many of these underground bunkers are located in the mountains of Switzerland These bunkers were created by military They were purchased by the swiss bank later These are not provided to all the customers Only to those who cleared many types of security clearance These bunkers were isolated from the roads connectivity only planes & helicopters can reach there So the security is high These locker’s rent is approx.

$500,000 Now imagine if the rent is this much then how valuable items are in them But there are many rich people around the world These vaults are easily rented out After the financial crisis of 2008, People have lower trust in currencies and buy gold & diamonds & keep them in these bunkers And transfer it to their generations with a code There are some situations where the Swiss bank gives their customer’s information to foreign governments But the government should have substantial criminal allegations.

Tax fraud is not considered a big crime in Switzerland So the information is not given in case of a tax fraud But according to the website of the swiss bankers association If the cases are money laundering, terrorist financing, blackmailing Then the information can be shared But only the information will be shared, not the money This information is only shared to stop the criminal activities But it was not like this before Swiss bank doesn’t share information in any situation The Swiss bank has another special feature.

Customers get interest when they put money in other banks As in India, you get 2.5% – 7% interest But the interest in the swiss bank is -0.75% that means you have to give interest If you have Rs.1 lakh then you have to give Rs.750 interest to the bank But still, people who keep their money here are in profit The reason is their strong & stable currency Their 1 swiss franc = Rs.

88 But in 2010, 1 swiss franc = Rs.44 That means if someone converted their currency to the swiss franc in 2010 And deposited in the swiss bank Its value in 2023 will get double The economy of Switzerland is different from other countries Inflation in other countries rises but they have negative inflation And if it ever happens it is about 1% In 2022 when every country was in bad condition At that time the inflation in Switzerland was 1.

3% Switzerland’s economy is stable That every person wants to be associated with that economy It gives safety & also the value will increase If the a/c holder in a swiss bank dies, If they have a nominee then the money will be transferred to the nominee But if there is no nominee & the a/c holder dies, Then the swiss bank doesn’t even know As the swiss bank doesn’t contact any a/c holder As it can reveal the secrecy of the account holder But now the swiss bank has a rule that, If there is no activity in 10 years in a swiss bank a/c

Then the swiss bank can contact the account holder And if they can’t contact the a/c holder, Then that a/c is blocked It was done with lakhs of accounts at the time of world war But there was no activity in Osama bin laden a/c for 6 years At that time the swiss bank blocked his account Osama opened swiss bank a/c in 1990 And he did no activity in that a/c till 1997 So the swiss bank blocked his a/c in 1997 because at that time there were no set rules regarding such accounts.

and there was a lot of pressure from America that Al-Qaeda’s money was in the Swiss bank. As a result, 25.5 million dollars were blocked from Al-Qaeda’s Swiss bank account. After a while, the actions of Swiss banks began to cause problems around the world. In 2014, the Organisation for Economic Co-operation and Development (OECD) created a declaration stating that all countries should share their taxpayers’ financial information with each other.

50 countries, including Switzerland and India, signed this declaration. This was around the time when you might have heard in the news in India about bringing back money from Swiss banks and so on. After this Modi government had promised that they will bring money from Switzerland In 2018 they established an automatic exchange of information systems between India and Switzerland Under this system, the financial information of accounts held by Indian residents in Swiss banks is shared with Indian banks by the Swiss banks.

After that, the first list of Indian account holders in Swiss banks came to India in September 2019 it had the names of some big people. The second list came in October 2020, the third list in October 2021 and the fourth list was released in October 2022. According to this list, the Switzerland Federal Tax Administration has said that it has shared names, addresses, country of residence, tax identification number, account balance and bank details of Indian citizens.

but these lists were of no use. Because as per agreement these data came for tax purpose only this data will only be kept with the Central Board of Direct Taxes (CBDT) and they will take action on it. According to OECD guidelines, this data cannot be made public, so names are known , but it can not be shared.

However, this information exchange only applies to accounts that are officially in the name of Indian citizens the main role of taking out black money from India was of Some Big players who have not opened accounts as Indian citizens, there are some small countries where rules are not strict so they open accounts as a citizen of those countries.

It is also being said that when the pressure to share account information in Switzerland was increasing, many people shifted their accounts to other countries. Along with this, it is also being said that people have shifted this money into digital currency, which Switzerland does not share details about.

Why all black money in swiss bank ?

In 2015, Indian Express published the names of some people under the name of #swissleaks and said that how much money these people have in Swiss bank, Mukesh Ambani, Anil Ambani and many chief ministers also have their names on that list. Despite this list, in 2020, data from the Swiss National Bank showed that funds held by Indian individuals and companies in Swiss banks were increasing and are at the highest levels in the last 13 years.

Most experts believe that the official data that has come out, is only about the legal wealth of Indians in Switzerland. The black money that comes from India to Switzerland actually goes through 5-6 tax havens, which means that it has been moved around through hawala from other countries as well. This makes it very difficult for authorities to find out whose money it is and where it came from.

In India, there has been a public debate on black money for at least the last 15 years. First, demonetization was done in the name of getting rid of black money. After that, data has also come out from Swiss accounts. But no significant amount come back to India Now, two things can happen, either the people who have black money are so clever that they make arrangements in advance, so they already know what’s going to happen and they manage to escape, or it is also possible that most of this money belongs to Indian politicians.

or those who are close to the political class. But even in this case the government would also keep changing – sometimes BJP, sometimes Congress, -sometimes mixed government so the government would keep changing so they could make an arrest the leader of the opposition leader even then no money came back instead, double the amount goes out of the country or it may be they are making fool out of us Thank You to read Business Connect Magazine.

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