Don't come fishing for account details: Swiss banks to India

[gs]

Looks like the Swiss bank witch hunt and the attempt to get those thousands of crores of rupees back to India is going no where. How I wish India had the clout of uncle Sam sometimes. Once again, the source is TOI, so credibility of this news is suspect as usual. Don't come fishing for account details: Swiss banks to India (

[Guest Hiten.]

Why can they share the info with USA and not India ? Why is Swiss bank so adamant to hide their client's information from a country's government body ? Given the current situation these days (terrorism), Swiss bank should be on their feet to share the info as who knows money laundering might have a pivotal point at their very lockers.

[yoda]

Why can they share the info with USA and not India ? Why is Swiss bank so adamant to hide their client's information from a country's government body ? Given the current situation these days (terrorism)' date=' Swiss bank should be on their feet to share the info as who knows money laundering might have a pivotal point at their very lockers.[/quote'] That's because they have secrecy laws wrt banking and all their big shot clients went there assuming these laws. If there is terrorst activity related to one of their clients, I am sure they will be willing to share, it is only when countries want blanket opening of the information, they have a problem. US got the information it wanted by suing UBS in the US.

[zubinpepsi]

simple, the govt just need to employ this guy.. baaaahhhhhhhhhh

[Lurker]

Looks like the Swiss bank witch hunt and the attempt to get those thousands of crores of rupees back to India is going no where. How I wish India had the clout of uncle Sam sometimes. Once again, the source is TOI, so credibility of this news is suspect as usual. Don't come fishing for account details: Swiss banks to India :((

This has little to do with clout as you put it. Admittedly United States has more of a clout than India, or for that matter any other country, but even they are unable to get inside Swiss bank accounts as and when they desire. Where do you think all the Mexican cartels, for example, keep their money and why have Uncle Sam being unable to lock that down? Swiss bank have their own history and traditions where they dont disclose their patrons. This is more for their historical reasons. If any foreign govt want their help they have to do it through the right channels. You can not expect Swiss banks to simply hand over the Indian sounding names to GOI.

[zubinpepsi]

is GOI really sincere here??do they really want to find out??

[Lurker]

is GOI really sincere here??do they really want to find out??

Who/what is GOI? Thats the question. Today GOI is Congress party who can easily use this against its political opponents(read BJP etc). Tomorrow it could be BJP and they will go after Congress leaders. Historically that has what has happened in Indian polity and it gives Swiss Banks a good enough reason to avoid a mess.

[zubinpepsi]

Who/what is GOI? Thats the question. Today GOI is Congress party who can easily use this against its political opponents(read BJP etc). Tomorrow it could be BJP and they will go after Congress leaders. Historically that has what has happened in Indian polity and it gives Swiss Banks a good enough reason to avoid a mess.

yes thts wat i mean.. Pranab is saying tht they gonna talk to swiss banks which is think is gonna be an eyewash.. do you think any government would do this?? I dont think so. so how are we gonna get those money back to India.??? we will never :((

[zubinpepsi]

'Swiss black money can take India to the top' March 31, 2009 19:41 IST Indian money stashed in the Swiss Bank has become a focal point of debate, especially after the Leader of Opposition and the Bharatiya Janata Party's [ Images ] prime ministerial candidate L K Advani [ Images ] raised the issue on Sunday. If elected, the BJP has vowed to bring the black money back home. Though the Congress dismissed the idea, the Swiss bank issue is slowly becoming a hot election issue. In fact the BJP also plans to carry out a mock election across the country on April 6 where people will have to cast their vote indicating whether Indian money in Swiss banks should be brought back to India or not. During his address, Advani said the BJP will form a task force comprising experts to prepare a strategic document for India to recommend ways to get back the national wealth stashed away illegally by corrupt politicians, businessmen and criminal overlords. One of the names he mentioned in the task force is Professor R Vaidyanathan, Professor of Finance at the Indian Institute of Management, Bengaluru [ Images ]. In this exclusive interview to rediff.com's Vicky Nanjappa, Vaidyanathan explains in detail the importance of bringing back the ill-gotten wealth and how the money got there in the first place. Firstly how much Indian money do you think is stashed away in the Swiss Banks? In 2006, the most recent Global Financial Integrity study, developing countries lost an estimated $858.6 billion (about Rs 43 lakh crore) to $1.06 trillion (abot Rs 51 lakh crore) in illicit financial outflows. Even at the lower end of the range of estimates, the volume of illicit financial flows coming out of developing countries increased at a compound rate of 18.2 percent over the five-year period analysed for the study. On average, for the five-year period of this study, Asia accounts for approximately 50 percent of overall illicit financial flows from all developing countries. This report shows that the average amount stashed away from India annually during 2002-06 is $27.3 billion (about 136,466 crore). It means that during the five-year period the amount stashed away is 27.3x5=136.5 billion (about 692,328 crore). It is not that all these amounts went to Swiss banks. It has gone to different tax and secret shelters. The share of Swiss banks in dirty money being a third of the global aggregate, some $45 billion out of the 136.5 billion stashed away from India would have been hoarded in these years in Swiss banks. The important point is that this is only for five years. More amounts were stashed away during the Nehruvian regime. So the loot for 55 years will be several times higher. In fact, in those days the rupee commanded a better value per dollar. So fewer rupee could get more dollars. So the estimation that the Indian money stashed away may be of the order of $1.4 trillion (about Rs 71 lakh crore). On what basis have you come to this conclusion? There is a lot of literature available as to how to estimate the illicit financial flow from developing countries. We find out what the nature of the flow is. I have also relied upon the study Illicit Financial Flows from Developing Countries: 2002-2006 Global Finanacial Intergrity authored by Dev Kar and Devon-Cartwright Smith, a project of the Ford [ Images ] Foundation. Financial flows in the context of this report includes the proceeds from both illicit activities such as corruption (bribery and embezzlement of national wealth), criminal activity, and the proceeds of ilicit business that become illicit when transported across borders in contravention of applicable laws and regulatory frameworks (most commonly in order to evade taxes). Which are the various tax havens, where the ill-gotten wealth of Indian businessmen and politicians are stashed? There are presumably more than 70 tax havens in the world. Indian wealth could be more in Switzerland [ Images ] and various British /US islands. At least 40 countries market themselves aggressively as tax havens [source: Internal Revenue Service USA on Abusive Off-shore Tax Avoidance schemes –Talking Points Jan 2008]. The well-known tax havens are Switzerland/ Liechtenstein/Luxemburg/ Channel Islands etc. Could you elaborate and tell us how the money got there in the first place? There are several methods/reasons. Under invoicing/over invoicing of exports and imports and getting the balance stored abroad. Kickbacks from major defense/civilian contracts. Not bringing the earnings abroad. In the old days smuggling of gold and illegal money. Transactions done abroad and not reported here. Hawala funds. Funds earned by artists/ entertainment industry /sports people and stashed abroad. When you want to indulge in adharma, hundreds of ways are open! We would like to know the terror connection. Do you think even terrorists are stashing away cash and using the tax haven route to send across money all over the world, to finance their activities? M K Narayanan, our National Security Advisor, has spoken about it in Berlin recently. Advani says that it is important to bring this money back. How can the government go about it and what are the various ways in which India can get its money back? Put it on the Global Agenda. Put it in G-20. Put it in the International Monetary Fund. Put it in Egmont Group. Also take a lead among all developing countries. Support US /German/French efforts. If India decides to take the initiative, will the Swiss authorities cooperate? It is not due to our pressure but that of US which will make them co-operate. When a family is in deep financial crisis then it tries to look at the small amount saved under the sugar jar by grandma. Same way developed economies are desperate for every dollar. Even if we do not act due to their efforts the list of crooks may be out, then we will be in a dangerous social situation since the who's who of India will be there. Instead we should get it and get the funds and decide on the steps to sterilise it. Otherwise, the world will laugh at us. Politicians sure must be having a lot of money in Swiss Banks. Do you think this factor will deter the government from acting? Public pressure will make them do it. Plus, the evolving global situation against tax havens. The money belongs to the poor farmers and unorganised workers of India. Also, Indian businessmen have a lot of their ill-gotten gains in these banks. The world situation is such that Indian businessman will want to bring it back now given the attractive returns in India. Do you think that the Indian government should demand all the Indian black money in Swiss banks? Of course. India should and must act. We are not a banana republic. You wrote in your column that the German foreign intelligence agency BND got names of 1,400 clients of the Liechtenstein-based LTG bank who were supposed to be suspected tax evaders. Of the 1,400, 600 were supposed to be Germans. Do you think of the remaining there will be Indians as well? Has the Indian government approached the German government for the list? Indian names will be there. Our tax evaders and crooks are like the omnipresent Maha Vishnu [ Images ] -- present in all continents and all tax havens. But our government has been lukewarm in this issue. It should have despatched immediately senior officials to get the names. Isn't it important to tackle the issue of domestic black money? It is definitely important. At least the domestic black money is used in our economy and to that extent it is productive. But the money kept in Swiss banks is neither useful to India nor does it benefit Indians. What role should the media play? The media has a very important role to play. At the moment it seems like most part of the media is more interested in the diet of an actress. Pressure by the media needs to be built up on this issue and remember that a lot of Indians don't just go to Switzerland to ski. What about the names of these persons? India must try and get the names. But more importantly should get the money back. It should be top on the agenda and India ought to take a moral lead in this issue. Will the Indian economy improve if the money is brought back? It will do phenomenally. India will be in the top five league if all the ill-gotten money is brought back. It will change the Indian scenario and I have been saying this since 1993. Do you think that these people will now try and pull out the money since this issue has become a hot topic? I don't think so. If they do then India should create an instrument and regulate frameworks to bring the money back. What kind of punishment do you suggest for these persons? Punishment is not the issue now. There is a need to create fear in them and follow what the international community does on this issue. Lastly do you think this is becoming just another election issue? The US and Germany [ Images ] took the lead and there is no election there. We should not treat this as an election issue. We have to take up this matter and if we don't then we will become a laughing stock of the entire world. Vicky Nanjappa

[Lurker]

so how are we gonna get those money back to India.??? we will never :((

The question is, should we get those money back to India in the first place? I am not quite sure. See, the link that you posted about R Vaidhyanathan clearly mentions countries that are used as tax havens, for example Luxumbergh etc. There is little any country can do about this, including United States. This was a key component of Obama's manifesto about tax havens but even he never mentioned how to get money back. The best he suggested was to make sure such companies who use tax havens were not getting any subsidies or tax benefits in USA. Unless Govt of India can show that the money has been obtained by nefarious means - drugs, terrorism etc. - there is nothing they can do about it.

[DomainK]

Who/what is GOI? Thats the question. Today GOI is Congress party who can easily use this against its political opponents(read BJP etc). Tomorrow it could be BJP and they will go after Congress leaders. Historically that has what has happened in Indian polity and it gives Swiss Banks a good enough reason to avoid a mess.

I don't think any government would want this. First of all, most parties, whether in power or not, want to be in the good books of the big companies and businessmen. Money is where they bow. Different parties may have different associations and interests, but for them all- parties, businessmen, industries- its a Pandora's box that no one would want to open. Once open, it will create problems for them all. And not just Indians, many foreign parties/companies/businessmen would not want this to happen as their profitable dealings will cease. No one in the top positions is going to benefit from it and everyone will be hurt one way or another. Any government that seriously contemplates doing this, will see the entire business community of India (and abroad) get together against it and throw it out of power over night. This will never happen.

[Guest Gunner]

The question is, should we get those money back to India in the first place? I am not quite sure. See, the link that you posted about R Vaidhyanathan clearly mentions countries that are used as tax havens, for example Luxumbergh etc. There is little any country can do about this, including United States. This was a key component of Obama's manifesto about tax havens but even he never mentioned how to get money back. The best he suggested was to make sure such companies who use tax havens were not getting any subsidies or tax benefits in USA. Unless Govt of India can show that the money has been obtained by nefarious means - drugs, terrorism etc. - there is nothing they can do about it.

Ahem....we have a law against anti money laundering since 2004.

[Guest Gunner]

If you run to the swiss banks and say "we know that you have our black money, give it back to us" - the swiss will ask us to **** off. We need to present proper financial information including the routing of money to Switzerland which is not within the capabilities of the Union government of India. Simple as that.

[King Tendulkar]

Good news for Mayawati and her ilk:--D