13 June 2024

What is the reason that Swiss bank is so famous all over the world?

What is the reason that Swiss bank is so famous all over the world? Why do the powerful and rich people of India leave their SBI bank and hide from the government and put money in this bank? What is the benefit of this and can I sit in India and open an account in Swiss bank? What documents do they take? Why is the number account in Swiss bank so famous? All these things will be discussed in detail. Before that, let’s understand one thing, black money. After that everything will be clear. See, any money whose source we are hiding from the government is black money.

Now one source is hidden by doing illegal activities such as extortion, smuggling and the other by doing legal activity. Like a shopkeeper is selling goods, it is not an illegal activity, but if he is not giving the bill by selling the goods and depositing money in cash in the house, then it is black money. In an ideal economy, the government should have a record of every transaction and what is not recorded, tax is not being received is black money and you cannot easily spend this black money that you go to the market and you start spending. People adopt different ways to hide it and whiten black, one of which is very famous to keep money in a Swiss bank.

See, this is not a single bank, all the banks of Switzerland are called Swiss banks, but there are some rules of Switzerland due to which the banks of Switzerland are famous all over the world. In 1713, the Swiss government made a law that no bank would share any details of its customers. And when this was said, there were many rich and powerful people from France and other European countries started keeping money in Swiss banks and from here a silence culture inside the Swiss bank starts, which has become very important for Swiss bank today.

After this rule, the flow of money from outside it started proving to be very beneficial for their government. After this, in 1934, the Swiss government again passed another law. Under Article 47 of the Banking Act of 1934, if any bank in Switzerland shares the details of its customers with any government or tax agency in the world, then there will be a punishable offence. Even if those details are of a criminal. If anyone wallets it, then he will be punished for up to 5 years. Seeing all this, Switzerland became an attractive destination for rich and powerful people around the world. Because they do not need to answer to anyone for their black money and immense wealth, not even the government of their own country.

The biggest feature of Switzerland is that this country is politically neutral. Switzerland has no enmity with anyone. Even during the Cold War, when all the countries were forced to take the side of either America or Soviet Russia, Switzerland was neutral at that time. Even in the Second World War, Switzerland chose the path of neutrality. Switzerland has not fought since 1501.

At the time of World War, people of all those countries who thought that Hitler would attack us and loot our money, etc., started keeping their money in Switzerland. In 1944, German Interior Minister Henry Simler also sent a special train to Switzerland, in which gold, jewelry and paintings worth thousands of crores were deposited in Swiss bank wallets.

Now see, it is not that only super rich or black money people deposit money in Swiss banks. Many times people deposit money here due to many other reasons besides privacy. In countries where the government is unstable, banks are not creditable. People there also deposit money in Swiss bank and along with this; the Swiss franc which is the currency of Switzerland is considered one of the premium currency of the word. Because of all these things, people have more trust in the Bank of Switzerland compared to the rest of the countries and Switzerland understands this very well.

Therefore, whether it is the G20 country or the group of OECD countries, all of them put a lot of pressure on the Swiss government to loosen their rules a little bit, but the Swiss government ignored all, infect and strict rules have been made that if a bank gives official information outside the bank, then it will be considered a punishable offence.

Now let’s see how to open an account in Swiss bank, a resident of any country in the whole world can open an account inside the Swiss bank. People like you and us can also open an account sitting at home in a Swiss bank, but the only problem is that there should be one million Swiss francs. At least the rest can be as much as the maximum.

To open an account in a Swiss bank, your minimum age should be 18 years, a valid passport with a validity of up to six months. But along with this, they also ask to submit you a resume, which contains all the details from your skills to what work you do and when and where you worked. You also have to give details of the fund you submit, how this fund has come to you. In Switzerland you can connect in any time zone and any language. Every facility is available for international customers. See, there was a very simple processor at first, but there was a lot of international pressure on Switzerland and there are new money laundering laws.

Therefore, it became a bit tough compared to earlier, opening an account in that bank and depositing money. But even after all this strictness, more money has started coming to the Swiss bank, which I gave the world war exam, the same thing is being repeated in the Russian war that is going on today.

Due to insecurity, the people of Ukraine and Russia want to keep their money in a safe place. This has increased the demand significantly. This time when digitalization was going on all over the world, this bank also used digital infrastructure and tried to connect users to the mobile payment system. According to the 2020 Swiss Payment Survey, people in Switzerland used mobile payment systems more than cash.

Now see that anyone can open a normal account inside this bank sitting at home. We can also open it by sitting in India. If we fulfill the minimum requirement, but Swiss bank is only famous for its number account, this is the account in which powerful and rich people keep money.

Opening a number account is not easy. For this, you have to visit physically once. Your privacy is taken care of inside Switzerland and in this number account. No matter how powerful the government of the world is, if there is no agreement with Switzerland to exchange tax-related information, then none of your information will be shared at any cost. This is a number account.

Its specialty is that instead of the name, a code is available. Apart from a few people in the bank, no one knows what is happening in these accounts. Normally, if someone has to send money, then in India, the person’s name, account number, IFSC code, branch, etc. are all required. But the number account of this bank has to share only one number, and all the work is done.

There are only a few select bank officials, only they have the details. The number account checks regulatory compliance, anti-money laundering, obligation, etc. It’s not that anyone got up and deposited the money. Proper verification is done and once your account is opened inside the bank after everything is checked, then saving the identity of the customer is at the top of the bank’s priority. The Swiss bank’s computer for the number account does not even have the name of the customer.

No employee can see your identity. Also, even if there is a cybercrime, your name does not come out. Similarly, the bank statement does not even have the name of the account holder. There is only one number which is the basis of the entire account. There is also a lot of cost in running this number account.

Its annual charge is around $ 300 i.e. 24,000 to 25,000 rupees. If you live outside Switzerland, the bank may also charge you a non-residential fee. In this, the Swiss bank also gives facilities that if you do not want this bank statement to go to your country, then that facility are also there. Because information can go from bank statement to government, but for not sending bank statement, reverse fees have to be paid.

In the rest of the banks, a separate fee has to be paid for sending the bank statement and here the reverse happens. Many years ago it was also possible that you could transfer money from the number account only by using the number. But now this does not happen when you transfer money from outside Switzerland to a Swiss number account, then the Swiss bank has to share your identity with that bank immediately.

And when the details were leaked in one or two cases, this thing was also closed. When you open a number account in a Swiss bank, you do not even get a checkbook because this will spoil the entire purpose of the number account. The full details of the transaction in your account can be caught, and then the bank gives a traveler’s check, which Swiss bank issues it. The amount is already mentioned in it, all the details are mentioned.

You just have to use it as a currency. You may have heard many times in the news that when this particular celebrity was investigated, a Swiss bank’s traveler’s cheque was caught. But for this particular traveler’s cheque, the bank also charges a separate commission of 1% from you. You can also book a safe deposit box in which goods can be kept only in the bank’s number account.

The safe deposit box is always connected to the bank account. Rich people hide their valuables from the world and keep them here. Bank also offers vaults for special customers which are in underground bunkers. It has storage facilities where people can hide gold, diamond and valuable physical items from all over the world.

Most of these underground bankers are located in the mountains of Switzerland. These are military formations, which were once built by the military and later bought by the Swiss bank. These bunkers are not available to everyone. It is only for those clients who have passed many types of security clearances. Some of these bunkers are deliberately cut off from road connectivity.

It can only be reached by planes or helicopters. These bankers get rent pay for about $ 5,00,000. Now you think about how many the goods will cost inside when the rent is so much, but there are very rich people inside the world. All these bankers run out comfortably.

After the financial crisis of 2008, people’s confidence in currency has decreased and people keep things like gold and diamond in the bunker and keep it passed on from generation to generation with code.

Now see if there is a situation like this. The Swiss bank also gives information about its customers to the foreign government, but the government must have substantive criminal exemption. Tax evasion, etc., all these things are not considered a big crime in Switzerland. Therefore, if there is a case of tax evasion, then information is not given in it. But according to the website of the Swiss Bankers Association, if there are all cases of money laundering, criminal organization, blackmailing, then information can be shared, but only information will be shared. It’s not like picking up all the money and giving it back.

This information is being given only so that the criminal activity can be caught and earlier it was not even there. Swiss banks do not give information in any situation. There is another special thing about Swiss banks. When you keep money in the rest of the world, the customer gets interest, such as in India, interest ranges from 2.5% to 7%, but in Swiss bank, interest is -0.75%, i.e. the reverse interest has to be paid.

Even after this, those who keep their money in Swiss banks remain profitable. Actually, there is a reason behind this, there is a strong and stable currency like a Swiss franc, which is now ₹ 92, but in 2010 a Swiss franc was ₹ 44, that is, if someone had converted his currency to a Swiss franc in 2010, then its value would have more than doubled in 2023. Switzerland’s economy is also very different from other countries.

Inflation increases in other countries, but they have negative inflation and if it ever happens, it will be up to 1% at most. Just now in 2022, when every country was in bad shape, inflation in Switzerland was up to 1.31%. Switzerland’s economy is so stable and fool-proof that every person wants to be associated with that economy. Safety and value will increase of money, that is different, and if for some reason the account holder in Swiss bank dies, then in that case, if account holder has added nominee, then that money is transferred to nominee.

But if there is no nominee and the account holder dies, then the Swiss bank does not know. Because Swiss Bank does not automatically contact any account holder because the secrecy of the account holder can be revealed, that in which country they live in. But now, there is a rule in Swiss bank that if there is no activity in any Swiss bank account for 10 years, then the Swiss bank after that can contact the account holder and if the account holder is not found even after contacting, then that account is blocked.

In 2014, the OECD Organization for Economic Cooperation and Development made a declaration that all countries will now share the original information of their taxpayers with each other. 50 countries signed the declaration, out of which Switzerland and India were also and this was the time when in India you would hear in the news that India’s money of Switzerland bank should come back to India.

After this, the Modi government came promising that it would bring money back to the country from Swiss banks. In 2018, they created an automatic exchange of information system of India and Switzerland, in which the details and financial details of the accounts of Indian residents of Swiss banks will be shared with India. After this, Switzerland gave the first list of Indian account holders of Swiss banks to India.

The first list came in September-2019, in which the names of big people of India were there. Second list came in October-2020, the third list came in October-2021 and the fourth list came in October-2022, in which the Federal Tax Administration of Switzerland shared a lot of details like the address, country of residence, tax identification number, account balance of Swiss bank account holder.

But this list was of no use because according to the agreement, this data came only for tax purpose. All these details will be kept within India and only by the Central Board of Direct Taxes (CBDT) and it can take some action on it. According to OECD guidelines, this data cannot be made public, so the list has come, everyone’s name has also come, but it cannot be told. And that was one more thing on the list. This was the list of bank accounts that were officially in the name of Indian Citizen.

But in the task of taking black money out of India, the main role was that of those big players who not only opened an easy Indian citizen account, but there are many small countries where the rules are very light. Become a citizen there and open an account in a Swiss bank. When the pressure to share account information on Switzerland was increasing from India, in the meantime, people have shifted the account elsewhere and the money has shifted to digital currency.

In 2015, the Indian Express published the names of some people in the name of Swiss Leaks and told how much money they have deposited in Swiss bank. This is the list that also has the names of Mukesh Ambani, Anil Ambani, many Chief Ministers, but surprisingly, after the arrival of this list, you will think that the people of India would have reduced the black money in Swiss banks, but this is not the case at all.

In 2020, when the Swiss National Bank’s report came, it was found that the record of the last 13 years was also broken. Indians are depositing money more in Swiss bank. In fact, the black money that reaches Switzerland from India is done through five to six tax havens countries like Malaysia, Singapore….etc . This means that it is very difficult for the Indian government to find out which money belongs to whom and from where.

But there has been a public debate on black money in India for at least the last 15 years. First, demonetization was done in the name of eliminating black money. After that, the list of Swiss account holders also came, but not a single penny came back to India.


Nitesh Kumar Singh

Technical content writer l Website developer

View all posts by Nitesh Kumar Singh →

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