There has been a lot of hue and cry over bringing the black money back to India. Supreme Court is asking Government of India to give a detailed report. We hear Switzerland is willing to share all details of holders. But with all this being said, where is the money and will it ever come back?
Don’t want to go into detail, but my answer will be NO – Never.
What is Swiss Bank? Swiss Bank is not a bank. Banks of Switzerland are Swiss Banks. What is important is they follow Banking Law of 1934 which makes disclosing details of holders by Banks a criminal offence. This was done to protect Jews from Nazi onslaught. For banks, the account holder is a number. This anonymity makes Switzerland the go to place to hide all the black money.
So why is Switzerland giving up details? India is not the only one with black money problems. USA, UK and Western European countries pressurised due to growing concerns of tax evasion. Some laws were amended to allow sharing of information (not sure if India is in list). The Wikipedia article on the Federal Act on Banks and Savings Banks is an interesting read.
This law only permits a bank to share information with others in cases of severe criminal acts, such as identifying a terrorist’s bank account or tax fraud, but not simple non-reporting of taxable income. So, it’s difficult to extract data even if you have proof of non-reported income – at least that’s what I understood from the article. There’s something more interesting in another Wikipedia article regarding Numbered Accounts.
… to restrict … numbered accounts … the Council of Europe mandated in 1980 … accounts be subject to international and domestic regulations pertaining to the verification of the identities of account holders and their activities. Under these … banks … may be required by a court order to reveal the owner’s name and financial details, and the identity of the holder or beneficial owner must be examined for obvious fraudulent intentions at the start of the banking relationship.
OK, so there is some mandatory verification of identities. Does it not apply to India? Of course this is from Council of Europe but when every law/rule/mandate as a European connection why not this? Can’t say about verification process but incase it has been done, who verified Indians to open account? But whatever be the case, to get the details from Swiss Banks only Swiss Court can request subject to criminal investigation or tax fraud but not for tax evasion.
The important question – everything settled – will we get the money? I say again – NO. It’s pretty simple that whoever has an account there is not stupid. When there is so much hue and cry for black money, why will someone leave the money in there? If you are agitating against black money, why will I wait for you to get me – I’ll take my money out first. But If I’m ruling and you’ve black money then I’m sure you’ll also act same.
In that case, we may never get latest status – Yes. Will we get the oldies? – May be. They are banks so will have beneficiaries. If the main holder is deceased, the why will the beneficiary wait? Beneficiary will either use it up or again act as above.
Government submitted some names and Supreme Court has acknowledged. Yes, that has been done but the fact is when was the report generated. If a Governement is seeking information (I don’t know how because as per Banking Law the court should do it), then insiders will be first to grab their own stuffs. There may be some legal process and such people do keep their eyes and ears open. So, we take out some more people from the list. Eventually, the list may be quite small with all big fishes already slipped from the net.
Where does the money go? Do you know where the money from Common Wealth Games Delhi 2010 go? Do you have idea of money gone from 2G scam? The money may be invested in property in India, outside India. It may be lying inside the bed of some one. I could be wrapped in polythene and hidden inside drain. The money could be anywhere but doubtfully not where we are looking for.
May be continued…