Bangladesh-linked money in Swiss banks falls

ASJADUL KIBRIA | Friday, 18 June 2021

Deposits in Swiss banks by Bangladeshi nationals and entities declined by 8.23 per cent to CHF (Swiss Franc) 562.86 million in 2020, according to latest data.

The Bangladesh-linked money, considered as deposits, was CHF 603.02 million in 2019.

The annual report of the Swiss National Bank or SNB titled 'Annual banking statistics for 2020' released in Zurich on Thursday unveiled the latest figures.

At the average rate of Tk 93.50 per CHF, the figures stand at Tk 52.63 billion in 2020 and Tk 56.38 billion in the previous year.

As the CHF appreciated significantly against BDT in the last year, figures quoted in BDT last year in the FE may not go with the current figures of the previous years.

The funds or deposits by Bangladeshi or any other non-Swiss individuals and entities are described by the Swiss central bank as 'liabilities' of the Switzerland's banks.

The liabilities are divided in two parts. The major part is "amounts due to bank" under which money linked with Bangladesh stood at CHF 530.63 million or Tk 49.61 billion in 2020 against CHF 583.19 million or Tk 54.529 billion in 2019.

The money under other part or "amounts due in respect of customers' deposits" stood at CHF 32.23 million or Tk 3.03 billion in the last year.

The above figures did not include the amount deposited through the fiduciaries or wealth managers.

The Bangladesh-linked money of around CHF 7.49 million or Tk 700 million was deposited through the fiduciaries, which was CHF 10.24 or Tk 957.44 million in 2019.

The SNB statistics, however, did not mention anything about the nature of the money- stashed or black money or illegally-transferred wealth.

Generally, a major chunk of the fund held in Swiss banks is perceived to be either stashed from different countries or black money.

Bangladesh Bank, a few years back, had prepared an  explanatory note on Bangladesh-linked money in Swiss banks.

It argued that around 10.0 per cent of such deposits were accounted for individual clients while rest of the amount is deposited by banks for trade-related transaction purpose.

Thus, according to the central bank, there is a very little amount of money actually stashed away from Bangladesh.

The official statistics released by the SNB also does not include the money that any Bangladesh-linked client of the Swiss banks might have deposited and kept in the name of shadow entities or shell companies.

Meanwhile, the total funds held by all foreign clients of the Swiss banks in 2020 remained almost static to around CHF 1.44 trillion as it was in 2019. The total funds included total liabilities of Swiss banks plus fiduciaries' liabilities.

In 2020, direct foreign deposits in the Swiss banks reached CHF 1.36 trillion while deposit through the wealth managers stood at CHF 83.41 billion.

The SNB statistics also showed that Indians' direct deposits in Swiss banks in the last year jumped by 190 per cent to around CHF 2552.63 million from CHF 891.91 million in 2019.

Pakistanis' money in Swiss banks also increased by 78 per cent to CHF 642.29 million in 2020, which was CHF 359.60 million in the previous year.

These figures, however, did not include deposits through the fiduciaries.

Both Indian and Pakistani deposits through the wealth managers declined to CHF 2.04 million and CHF 6.62 million respectively in the last year.

Thus, Bangladeshi deposits in Swiss banks through the wealth managers (CHF 7.49 million) became higher than India and Pakistan.

The Swiss banking system generally ensures full confidentiality of the depositors which turns the country into one of the largest tax havens in the world.

Nevertheless, for the last couple of years, the Swiss government has come under pressure to strictly regulate the banking system and share depositors' information with the other governments.

The annual report of SNB was earlier named as 'Banks in Switzerland.'

This year, the Swiss central bank has changed the name and for the first time, included 'results from consolidated financial statements in addition to data from individual financial statements required by law.'

Thus it becomes a more comprehensive data set on the annual financial statements of banks in Switzerland for the 2020 financial year.

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