Swiss data enough to identify hidden wealth

New Delhi/Berne: As India prepares to analyse troves of Swiss banking details of its citizens, a large portion of the first tranche of data being shared by Switzerland under an automatic information exchange framework this month relates to accounts that have been already closed due to fear of action, bankers and regulatory officials said.

However, the data that was prepared by all Switzerland-based banks under a direction from the Swiss government for despatching further to the Indian authorities provides full details of the entire flow of funds to and from all the accounts that were active even for a single day in the year 2018, bankers said.

The data can be quite useful for establishing a strong prosecution case against those who had any unaccounted wealth in those accounts, as it provides entire details of deposits and transfers as well as of all earnings including through investments in securities and other asset classes, they said.

On condition of anonymity, several bankers and regulatory officials said the details being shared relate mostly to businessmen, including non-resident Indians now settled in several South-East Asian countries as well as in the US, the UK and even some African and South American countries.

Bankers admitted there was a huge outflow from these accounts in the last few years after a global crackdown began against the so-called high-secrecy walls associated with the Swiss banks and several of these accounts got closed.

However, the Automatic Exchange of Information (AEOI) mechanism provides that details are being shared with India even for those accounts that were closed in 2018.

Besides, there are at least 100 cases of older accounts held by Indians, which might have been closed before 2018, for which Switzerland is in the process of sharing details with India under an earlier framework of mutual administrative assistance as Indian authorities had provided prima facie evidence of tax-related wrongdoings by those account holders.

These relate to people engaged in businesses like auto components, chemicals, textiles, real estate, diamond and jewellery, steel products, etc. Regulatory and government officials said the special focus of the analysis of the Swiss bank data could be on identifying people with political links.

A Swiss delegation was in India late last month before the first set of details could get shared under the new automatic information exchange, while the two sides also discussed possible steps to expedite execution of tax information sharing requests made by India in specific cases and enhancing of collaboration in offshore tax compliance matters.

The AEOI is being seen as a major boost in India's fight against suspected black money stashed abroad.