Burgeoning Wealth of the Uber Rich: Understanding the Surge in Indian Funds in Swiss Banks
A Balanced Perspective Beyond the Rhetoric of Black Money, Often Adopted by the Modi Government Critics.
Author: Karan Bir Singh Sidhu, IAS (Retd), Special Chief Secretary, Punjab Cadre; M.A. (Economics), University of Manchester. Writes regularly on global economic trends, money-laundering, and India’s growth trajectory in the global financial system.
Author’s Note:
This article presents our objective analysis of the increase in Indian-linked Swiss bank holdings, aiming to move beyond simplistic alarmism and partisan rhetoric. In the interest of balance and fairness to the critics of the Modi administration, we will shortly publish their perspective as well — with this article referenced as a footnote therein.
Understanding the Surge in Indian Funds in Swiss Banks: Context and Perspective
Indian money parked in Swiss banks more than tripled in 2024, reaching 3.54 billion Swiss francs (approximately ₹37,600 crore), the highest level since 2021, according to Swiss National Bank data.
This sharp rise from the previous year’s CHF 1.04 billion certainly merits careful scrutiny. However, it is equally important to approach this phenomenon with perspective — resisting simplistic or politically motivated interpretations that reduce a complex financial reality to a single narrative about black money or systemic failure.
Indeed, the surge reflects multiple factors: India’s sustained economic growth, greater global integration of Indian businesses and financial markets, rising legitimate international investment by Indian individuals and corporates, and the growing prosperity of India’s diaspora. It is occurring in a global regulatory environment that is far more transparent and accountable than in the past.
Breaking Down the Numbers: Institutional vs Individual Holdings
A detailed examination of the Swiss bank data is critical to understanding what is really going on. The numbers show that:
Customer deposits by individuals: CHF 346 million (₹3,675 crore), a modest 11% rise — roughly one-tenth of the total.
Funds routed via other banks and financial institutions: CHF 3.02 billion — the overwhelming driver of the increase.
Fiduciary or trust holdings: CHF 41 million (up from CHF 10 million).
Other financial instruments: CHF 135 million.
These figures clearly demonstrate that the rise is predominantly institutional in nature — involving banks, corporates and sophisticated financial flows — rather than individual efforts to park undeclared wealth overseas. The scale and composition of these funds are consistent with the growing outward financial engagement of Indian enterprises and investors.
The NRI Wealth Factor: A Key Driver
One cannot ignore the powerful role played by India’s increasingly prosperous diaspora and its globally mobile high-net-worth individuals (HNWI).
In 2024, India added over 33,000 new millionaires, bringing the total HNWI count to 378,810.
Total HNWI wealth grew 8.8% to USD 1.5 trillion.
NRI remittances reached a record USD 129 billion — the world’s highest.
Given these figures, linked to all Indian passport holders, it is unsurprising that Indian-origin wealth — entirely legitimate in most cases — is finding its way into leading global financial centres such as Switzerland. NRIs and globally oriented Indian investors seek access to diversified portfolios, stable financial jurisdictions, and sophisticated wealth management services — which Swiss banks are well-positioned to provide.
Transparency Revolution: The End of Banking Secrecy
It is also important to place today’s Swiss banking environment in historical perspective. The myth of secretive Swiss bank accounts is now largely obsolete:
Automatic Exchange of Information (AEOI) between Switzerland and India has been fully operational since 2019.
India has now received five annual batches of comprehensive Swiss account data, including account balances, beneficial ownership, and income details.
Swiss authorities have confirmed that this data is being actively used by Indian enforcement agencies to detect any unreported wealth.
In short, the era when Swiss banks could be used as opaque repositories for black money is over. The current regulatory framework is one of unprecedented transparency — a fact acknowledged by tax authorities in both countries.
The Black Money Act: A Powerful Deterrent
India’s Black Money (Undisclosed Foreign Income and Assets) Act, 2015, has created a robust legal deterrent to tax evasion:
30% tax plus 90% penalty on undeclared foreign income or assets.
Criminal liability with jail terms of up to 10 years.
A reversal of burden of proof — the taxpayer must establish the legitimacy of the funds.
The effectiveness of this framework is evident from the results of the 2024 CBDT compliance campaign, which led to ₹29,208 crore in voluntary disclosures by 30,161 taxpayers. The deterrent value of this legislation cannot be overstated — it has fundamentally altered the cost-benefit calculus for potential tax evaders.
Legal Framework for Foreign Asset Holding
A further point that often escapes media headlines is this: holding foreign assets is not illegal, provided they are properly disclosed.
Indian taxpayers must report such holdings in Schedule FA of their income-tax returns, and any related income in Schedule FSI.
A growing number of global Indians — including NRIs and Indian-resident HNWIs — now use fully compliant channels to manage wealth across jurisdictions, which is entirely consistent with India’s legal and tax norms.
Perspective: Swiss Holdings vs. Domestic Deposits
Finally, when viewed in macroeconomic context, the dramatic headlines about "tripled funds" in Swiss banks take on a more balanced dimension:
Total Indian-linked Swiss bank holdings: ₹37,600 crore — just 0.018% of India’s ₹2,17,17,259 crore in domestic bank deposits.
Direct individual deposits: an almost negligible 0.0017% of total deposits.
Meanwhile, India’s domestic banking sector grew at a healthy 10.6% last year — underscoring the ongoing expansion of the domestic financial ecosystem. In this light, the Swiss bank data is a small blip in the vast scale of India’s overall financial architecture.
Summing Up: A Reflection of Legitimate Wealth Growth
Taken together, the tripling of Indian-linked funds in Swiss banks in 2024 is best understood as a reflection of:
India’s rising global economic profile.
The growing sophistication of Indian corporates and investors.
The prosperity and financial clout of India’s diaspora.
The continuing globalisation of Indian capital flows.
It is also a tribute to stronger enforcement and greater transparency — not the weakness of Indian policy. The old narrative of "black money in Swiss banks" is increasingly outdated, in light of:
The dismantling of Swiss banking secrecy.
The effectiveness of India’s anti-evasion legal framework.
The positive response seen in compliance campaigns.
The international openness of India’s financial system.
To reduce this story to a simplistic tale of policy failure would be a distortion. A more careful reading of the facts suggests that the surge in Swiss bank holdings is — in large part — a natural byproduct of India’s economic growth and global financial engagement, not an indictment of government policy.