Switzerland is not alone. Other nations that rank high up on the Financial Secrecy Index published by the Tax Justice Network every year exhibit similar traits. Take the case of Jersey, which ranked among the top 20 nations that contribute to global tax avoidance and tax evasion. Between 2013 and 2017, non-bank deposits held by Indians in this small island off the British coast fell by almost a third. In 2013, Indians held $1.3 billion in Jersey. By 2017, these non-bank deposits were down to $888 million. According to BIS, such deposits held by Indians in that territory had hit a peak of $2.7 billion in 2008. They fell for a few years before rising again in 2011. However, such deposits have been falling ever since. (See Graphic)
A similar scenario is unfolding with the money stashed by Indians in Luxembourg – a nation that features
in the top 10 jurisdictions that encourage individual and corporate tax evasion according to the Financial Secrecy Index. According to BIS, non-bank deposits held by Indians in this tiny European nation fell by 70 per cent from 2013 to 2017. In 2017, Indians held $44 million. In 2013, such deposits by Indians in Luxembourg stood at $1.4 billion. These deposits have been consistently falling since 2012, but the decline has been more pronounced under the Modi government.
While these nations have seen huge falls in the amount of non-bank deposits by Indians, there are others where the decline hasn’t been as stark.
Take the case of Guernsey, another British Crown dependency off the French coast, which ranks 10th on the Financial Secrecy Index. Unlike other nations, Indians do not hold much money as non-bank deposits here. According to BIS, Indians held $74 million in 2014 which declined to $64 million in 2017. Then there is the curious case of Hong Kong
-– a jurisdiction that could well be thorn in India’s flesh when it comes to fighting money laundering and tax evasion. Unlike all other nations, there has been a significant increase in the amount of non-bank deposits held by Indians in that territory. Indians now hold as much money in such deposits in Hong Kong
that they used to in Switzerland in 2010. BIS, which has been providing information on this Asian nation only since 2015, has some interesting trends.
In 2015, Indians held $3.8 billion in non-bank deposits in Hong Kong.
In 2017, such deposits stood at $4.6 billion -– a rise of 21 per cent during Modi’s tenure.
Clearly, Modi may have the bragging rights for being in the saddle when illicit money stashed by Indians in Swiss banks is at an all-time low. But Hong Kong, which is among the world’s top five nations attracting black money, could just be a different ball game altogether.