In this article, we will talk about such a topic, about which people start thinking more when they have too much black money. So let’s know why people like to keep money in Swiss bank.

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Swiss bank
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| Swiss Bank : Understanding

The Swiss bank is often in the news because it differs from other ordinary banks in many ways because of the special benefits that its customers offer, such as a low level of financial risk and a high degree of confidentiality.

That is to say, Swiss law prohibits a bank from disclosing any information about an account (even its existence) without the depositor’s permission, except in cases where serious criminal activity is suspected. Is.

You will be surprised to know that opening a Swiss bank account is not much different from opening an account in a standard bank. You will need to fill out forms and provide documents that prove who you are and what you do. However, due to certain circumstances regarding confidentiality, the level of scrutiny of providing official documents of your identity is more stringent.

It is not very difficult for a citizen of another country to open an account in a Swiss bank. Residents outside Switzerland must be at least 18 years old to open a Swiss bank account. Account holders can choose their currency. Most people buy Swiss francs, U.S. dollars. Choose to hold your funds in Dollars, Euros, or British Pounds Sterling. There is usually no minimum balance requirement to open an account, but once the account holder has deposited the funds, there is usually a minimum balance requirement, which varies by bank.

That is to say, usually when we keep our money in banks, the bank gives us some interest on it, but here this case may be a little different. That is, you may have to pay some fees in exchange for keeping your money.

Swiss anti-money-laundering laws require a potential Swiss bank account holder to provide a variety of documents to open an account. These include certified copies of your passport and documents explaining your profession, such as tax returns, company documents, professional licenses, etc.; Proof of the source of your funds; and may also include other specific personal information.

| Why do people like to keep money in Swiss banks?

Early Swiss laws protecting the identity of customers were codified by the authorities in Geneva in 1713 AD. Since then, the notion of confidentiality has always been at the heart of all banking laws enacted in Switzerland.

In 1934, a law made sharing customer information with foreign countries a criminal offense.

Article 47 of the Swiss Banking Act states that it would be an offense to disclose customer details to almost anyone, including the government, without the consent of the customer and in the absence of a criminal complaint. A violation can land a person in prison for five years.

And thus over the years, the bank became a magnet for black money holders and institutions across the world. However, there is one more thing to be said about it, which is something like this;

As we understood above, in the year 1934, the Parliament here made a special law to keep the information confidential. Although the law was not made to protect black money, it was made because Jews were persecuted by the Nazis at that time.

If the Nazis had come to know that these people had a lot of money which was kept in the bank, they would have been tortured a lot. This law was made to maintain this secrecy, but later taking advantage of this law, it was used to keep black money safe.

That’s why this bank became so popular. However, now the rules have been changed a lot and now it is no longer as safe for the black money holders as before.

Such a turning point took place in May 2014 when a declaration prepared by the Organization for Economic Cooperation and Development was signed by more than 50 countries. Many countries of the world have, for the first time, agreed on a global exchange of information about the financial information of their respective taxpayers. Switzerland also promised to share information about customer bank accounts.

Meanwhile, talk on black money started in India too. Prime Minister Narendra Modi came to power in 2014, and promised to bring back black money.

Since 2018, India and Switzerland have a system of automatic exchange of information in tax matters. Under this, for the first time in September 2019, detailed financial information of all Indian residents with accounts in Swiss financial institutions was provided to Indian authorities.

But most experts agree that the official figures given by Swiss banks are of legal assets held by Indians there. Black money reaches Swiss banks through 5-6 tax havens like Jersey Island to Havana. This process is called layering, which makes it very difficult for officials to trace the mark.

Meanwhile, India has passed a black money law that arms its tax authorities to act against citizens with secret foreign bank accounts and assets.

Data from the Swiss National Bank shows that in 2020, the money held by Indian individuals and companies in Swiss banks reached its highest level in 13 years. Clearly, despite all the negative connotations, Swiss banks remain popular.

Hope by now you must have understood why people like to keep money in Swiss bank. If you liked this information, then do share this article and do read other great articles available on the site;


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Important Links,
Swiss Bank Accountย investopedia
https://www.business-standard.com/podcast/finance/what-are-swiss-banks-and-how-do-they-work-122042100028_1.html