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Friday,30-July-2021

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Finance Ministry refutes reports of alleged black money held by Indians in Switzerland

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The Union Finance Ministry on Saturday said that increase in deposits of Indians in Swiss Banks could be on account of increase in business of Swiss bank branches located in India and raised Inter-bank transactions, rather than due to an increase in alleged black money held by Indians in Switzerland.

It, however said that Swiss Authorities have been requested to provide the relevant facts along with their view on possible reasons for increase or decrease in deposits so that facts could be presented in correct perspective.

Certain reports suggested that that funds of Indians in Swiss Banks have risen to over Rs 20,700 crore (CHF 2.55 billion) at the end of 2020 from Rs 6,625 crore (CHF 899 million) at the end of 2019, reversing a 2 year declining trend. It has also been stated that this is also the highest figure of deposits in the last 13 years.

“Reports allude to the fact that the figures reported are official figures reported by banks to Swiss National Bank (SNB) and do not indicate the quantum of much debated alleged black money held by Indians in Switzerland. Further, these statistics do not include the money that Indians, NRIs or others might have in Swiss banks in the names of third-country entities,” the Ministry statement said.

The statement added that the customer deposits have actually fallen from the end of 2019 in a Swiss Banks. The funds held through fiduciaries has also more than halved from end of 2019. The biggest increase is in “Other amounts due from customers”. These are in form of bonds, securities and various other financial instruments, the finance min statement said.

The ministry also ascribed various other reasons for increase in deposits and not possibly on account of the increase of deposits in the Swiss banks out of undeclared incomes of Indian residents. It said that that increase in deposits may be on account if increase in deposits owing to the business of Swiss Bank branches located in India or Increase in Inter- bank transactions between Swiss and Indian Banks. Also, it could be due to capital increase for a subsidiary of a Swiss Company in India or increase in the liabilities connected with the outstanding derivative financial instruments.

The government has issued clarifications in wake of widely held position that it has curbed generation of black money in the economy or unaccounted funds of Indians stashed abroad. The fresh tax agreements reached between India and certain perceived tax havens has introduced certain instruments to prevent round tripping of funds and generation of black money.

It is pertinent to point out that India and Switzerland are signatories to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC) and both countries have also signed the Multilateral Competent Authority Agreement (MCAA) pursuant to which, the Automatic Exchange of Information (AEOI) is activated between the two countries for sharing of financial account information annually for calendar year 2018 onwards.

Exchanges of Financial Account information in respect of residents of each country have taken place between both countries in 2019 as well as 2020. In view of the existing legal arrangement for exchange of information of financial accounts (which has a significant deterrent effect on tax evasion through undisclosed assets abroad), there does not appear to be any significant possibility of the increase of deposits in the Swiss banks which is out of undeclared incomes of Indian residents, the finance ministry said.

Business

To clear debts, Axis Bank manager loots ICICI branch, kills officer

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In a shocking incident, an Axis Bank Branch Manager allegedly committed an unsuccessful heist on the ICICI Bank and stabbed a deputy branch head there to death, police said here on Friday.

The incident happened late on Thursday around 8.00 p.m., after the close of banking hours at the ICICI Bank’s Virar East Branch.

According to Virar Police Station Senior Police Inspector Suresh Warade, the accused Anil Dubey — the Naigaon Axis Bank Branch Manager, who was a former longtime employee of ICICI Bank, has been arrested.

In the scuffle that ensued between Dubey and the ICICI Bank Deputy Manager Yogita Nishant Choudhary, and her cashier colleague Shraddha Devrukhkar, he allegedly stabbed them both before attempting to flee with the bag full of the looted booty, but was caught outside by the locals.

While Vartak, 36, succumbed to her injuries later, Devrukhkar, 32, is undergoing treatment at a local hospital and further probe is on in the sensational case, said Warade.

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Business

Toyota to raise price of Innova Crysta

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Automobile major Toyota Kirloskar Motor will raise the price of its flagship model, Innova Crysta.

Accordingly, the price will be raised by up to 2 per cent, effective August 1, 2021. The company cited rising input costs as the key factor behind the price hike.

“This increase is necessitated to partially offset the substantial increase in input costs,” the company said in a statement.

“The price increase has been tapered down considering the impact on our valued customers,” it added.

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Business

US economy grows at annualized 6.5% in Q2

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The US economy grew at a lower-than-anticipated annual rate of 6.5 per cent in the second quarter, marking the return to an above pre-pandemic level of overall economic activity, the Commerce Department reported.

However, the 6.5 per cent gain was considerably less than the 8.4 per cent Dow Jones estimate, Xinhua news agency reported.

In the first quarter, real GDP increased by 6.3 per cent, 0.1 percentage point less than previously reported, according to the latest data issued by the Department on Thursday.

The increase in real GDP in the second quarter reflected increases in personal consumption expenditures (PCE), non-residential fixed investment, exports, and state and local government spending that were partly offset by decreases in private inventory investment, residential fixed investment, and federal government spending, the Commerce Department report showed.

Imports, which are a subtraction in the calculation of GDP, increased.

The GDP data was released a day after the Federal Reserve signaled that it was inching closer to tapering its asset purchases amid concerns over surging inflation and the rapid spread of the Covid-19 Delta variant.

In the latest update to its World Economic Outlook, the International Monetary Fund (IMF) on Tuesday projected the US economy would grow by 7.0 per cent this year, up 0.6 percentage point from its April projection.

The upward revision reflects the anticipated legislation of additional fiscal support in the second half of 2021 and improved health metrics.

In 2022, the US economy is expected to grow by 4.9 per cent, according to the IMF.

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