Money in Swiss Banks: Bangladeshis’ deposits drop 3rd year in a row
Funds parked by Bangladeshi individuals and firms in Swiss banks dropped 6.6 percent to 563 million Swiss francs (about Tk 5,215 crore) in 2020, the third year in a row in which it declined.
Of the sum, 530 million Swiss francs belong to different banks and the rest to Bangladeshi nationals, according to data from the Swiss National Bank (SNB) released yesterday.
The data does not specify who the amount belongs to and whether the funds were laundered from Bangladesh.
However, deposits from India hit a 13-year-high of about 2.6 billion Swiss francs in 2020, up from 899 Swiss francs a year earlier.
From Pakistan too, deposits surged 77.8 percent to 640 million Swiss francs.
Switzerland has long been the preferred destination of the wealthy from all over the world for parking their funds for tax evasion purposes thanks to the high level of confidentiality protections the country's banking law allows.
For instance, the Swiss Banking Law of 1934 made it criminal for Swiss banks to disclose any information regarding an account (even its existence) without the depositor's permission.
The only exception, the only way information will be revealed, is if a government agency claims that a depositor is involved in a serious criminal act or is involved in some other financial issue (such as bankruptcies, divorces, and inheritances).
Like people from all over the world, Bangladeshis have been stashing their funds in Swiss bank accounts.
The deposits cannot automatically be attributed as black money as the Bangladesh government and particularly the Bangladesh Bank keep their funds in Switzerland too as well as the Bangladeshi nationals working abroad, said Ahsan H Mansur, executive director of the Policy Research Institute.
"Of course the money launderers also hide their funds there," he said, while urging the government to disclose how much it has kept in Switzerland for the sake of inferring how much ill-gotten wealth is stashed in the European nation.
However, the lure of Switzerland as a tax haven has come off in recent years among Bangladeshis, said Mansur, a former economist of the International Monetary Fund.
There are other options like Jersey, Cayman Islands, Panama, Singapore and Dubai.
"Swiss banks are no longer safe as the Switzerland government is more open to sharing information with other countries."
Which, probably, explains the decline in deposits attributed to Bangladeshi nationals.
"Or it could be that the Bangladesh Bank itself has withdrawn some funds and deposited it elsewhere as the interest rate in Switzerland is negative," Mansur added.
However, a BB official said that it is not easy to get information on Swiss bank accounts even though the two countries' Financial Intelligence Units have an agreement to do so.
"They only cooperate when there is a court order and there is a specific name," he said on condition of anonymity as he is not authorised to speak with the media.