22 June 2025
In a striking financial development, Indian money parked in Swiss banks has more than tripled in 2024, reaching 3.54 billion Swiss francs (approximately ₹37,600 crore), according to data released by the Swiss National Bank (SNB) on June 19, 2025. This marks the highest level of Indian-linked funds in Swiss banks since 2021, sparking widespread debate about the nature of these assets, their origins, and the implications for India’s economy.
The jump in Indian funds is a dramatic turnaround from 2023, when the total liabilities of Swiss banks toward Indian clients plummeted by 70% to a four-year low of CHF 1.04 billion. This volatility underscores the cyclical nature of offshore financial flows, with historical peaks like the CHF 6.5 billion recorded in 2006 hinting at broader economic patterns. The 2024 increase driven largely by funds held through bank channels and other financial entities rather than individual customer accounts suggests a shift toward institutional investments or custodial holdings, rather than a resurgence of personal wealth stashing.
Direct deposits from Indian clients rose modestly by 11% to CHF 346 million (about ₹3,675 crore), accounting for just one-tenth of the total Indian-linked funds. The bulk of the growth, CHF 3.02 billion, is attributed to holdings via other banks, with additional contributions from fiduciaries (CHF 41 million) and instruments like bonds and securities (CHF 135 million). This composition challenges the popular narrative that Swiss banks are primarily a haven for individual tax evaders, pointing instead to complex financial arrangements possibly tied to India’s growing global economic footprint.
The SNB data, based on official bank reports, does not specify the ownership or purpose of these funds, leaving room for speculation. Swiss authorities have consistently clarified that these assets cannot automatically be labeled as “black money”—funds illicitly earned and hidden from tax authorities. Instead, they emphasize Switzerland’s cooperation with India in combating tax fraud and evasion, facilitated by an automatic exchange of information (AEOI) agreement initiated in 2018. The first data transfer occurred in September 2019, and since then, Switzerland has shared details on hundreds of accounts with suspected financial irregularities.
This collaboration stems from a 2016 bilateral treaty and global pressure to dismantle Switzerland’s long-standing banking secrecy. However, the data excludes funds held through entities in third countries, a loophole that, according to the Bank for International Settlements (BIS), may obscure the full picture. BIS data shows Indian non-bank deposits with Swiss banks rose 6% in 2024 to USD 74.8 million (₹650 crore), a modest uptick after three years of decline, with a peak of USD 2.3 billion in 2007.
What’s Driving the Surge?
Several factors could explain this rebound. India’s economy, one of the world’s fastest-growing, has seen increased cross-border investments, mergers, and acquisitions, potentially channeled through Swiss financial hubs. The rise in institutional holdings might reflect trust management, portfolio diversification, or hedging against domestic economic uncertainties. Alternatively, it could signal a return of confidence in Swiss banking amid global financial realignments, especially as total foreign client funds in Switzerland dipped slightly from CHF 983 billion in 2023 to CHF 977 billion in 2024.
Globally, the UK led with CHF 222 billion, followed by the US (CHF 89 billion) and West Indies (CHF 68 billion), while India climbed to the 48th rank from 67th, still below its 46th position in 2022. Neighboring countries like Pakistan (CHF 272 million) and Bangladesh (CHF 589 million) also reflect diverse trends, with Bangladesh’s sharp rise mirroring India’s, possibly tied to regional economic dynamics.
Implications and Public Reaction.
Swiss officials maintain that the AEOI framework ensures accountability, with regular data sharing helping India track irregularities. However, the modest rise in direct deposits suggests that high-net-worth individuals may be diversifying through legal channels, possibly in response to stricter domestic regulations like the 2016 demonetization and subsequent tax reforms.
This surge raises important questions for policymakers. Is this a sign of India’s financial maturation, or a red flag for unaddressed tax evasion? Enhanced scrutiny and international cooperation will be key to distinguishing legitimate investments from illicit flows. As India rises on the global financial stage, the challenge will be to align offshore wealth with domestic growth, ensuring that the ₹37,600 crore in Swiss banks contributes to, rather than detracts from, the nation’s economic narrative.
For now, the data offers a snapshot of a complex financial landscape, one that reflects both opportunity and ongoing challenges. As discussions unfold, the true story of these funds may only emerge with greater transparency—a goal that both India and Switzerland are, in theory, committed to achieving.
