Swiss banks ask Indian clients to come clean on the cash
30 March 2015
Swiss banks, which have so far been safe havens for parking unaccounted money for Indians, have now started asking their Indian clients to come clean with their cash in order to refurbish the image of the Swiss banking system.
Indians owning accounts in Swiss banks have been asked to provide fresh undertakings to ensure that the money that is deposited in their accounts is tax-paid.
Amidst pressure from the Indian government to reveal names of persons and entities who have stashed away black money into secret accounts, these banks have started asking high net worth individuals and corporate clients to produce audit certificates to ensure the ''clean status'' of their money.
While Switzerland has agreed to cooperate with India on the issue of tax avoidance with the Indian government in hot pursuit of black money, Swiss authorities are still reluctant to reveal the names of account holders saying they cannot act on stolen information.
Sources said that Swiss banks are asking their Indian customers to provide fresh undertakings that all taxes have been paid on funds deposited by them in these accounts.
According to them, banks are also asking both corporate and individual clients to furnish auditor certificates certifying "clean status" of funds, assets and income related to their accounts.
Reports said banks have also sent such directives to major clients, including high networth individuals, wealth management and portfolio management companies.
The Swiss government is slowly bringing its financial sector regulations on par with international rules after demands from across the world, including the OECD, for a more open regulatory structure for its banking system.
Earlier this month, Swiss government said talks on automatic exchange of tax information with India would begin at the "earliest" once the domestic procedures are in place.
Last year, Indian and Swiss officials held high level deliberations on boosting co-operation to deal with the black money issue.
India is currently pursuing cases related to its residents stashing away unaccounted funds to HSBC Switzerland and have procured a list of names of some of those from the French government a few years back.
Indian authorities are reported to have asked HSBC to show cause as to why action should not be initiated against it in case of non-cooperation with regard to "suspected tax evaders and offenders of tax crimes".
There are as many as 628 names in the HSBC list, which the government has handed over to the Supreme Court.
HSBC has been encountering regulatory issues in multiple jurisdictions, including the United States, over helping several high networth individuals to avoid paying tax.
To curb the black money menace, India's Supreme Court had constituted a special investigation team (SIT) to probe various cases.
The government is also coming out with legislation to provide for stringent punishment, including heavy penalty for stashing away unaccounted money.
Finance minister Arun Jaitley had said that all efforts are being made to bring to book those who have been named in the HSBC list of black money holders and there is evidence against them.