Deposits in Swiss banks soar 23-fold amid political upheaval

After two years of steep decline, Bangladesh-linked money in Swiss banks surged dramatically in 2024, soaring about 23 times and raising fresh questions amid political unrest and concerns over illicit capital flight.

The Swiss National Bank (SNB) released the Annual Banking Statistics, 2024 in Zurich on Thursday, unveiling the picture.

It showed that the total deposits linked with Bangladesh in forms of trade finance and investment, coupled with funds of some Bangladeshi nationals and entities, stood at CHF (Swiss Franc) 598 million in 2024.

Based on the average current conversion rate of Tk 149 per CHF, the amount of deposits is estimated to be equivalent to Tk 89.12 billion.

As Bangladeshi taka (BDT) depreciated heavily against the major currencies in the last couple of years, figures quoted in BDT in the last few years in the FE may not match the figures of the previous years' converted in the current exchange rate.

In the previous two years, the amount was CHF 26.38 million (or Tk 3.93 billion) in 2023 and CHF 58.38 million (or Tk 8.69 billion) in 2022.

The funds or deposits by Bangladeshi or any other non-Swiss individuals and entities are described by the Swiss central bank as 'liabilities' of Switzerland's banks.

Again, the liabilities are divided mainly in two parts. The major part is "amounts due to the bank" under which money linked with Bangladesh stood at CHF 576.61 million or Tk 85.91 billion in the last year.

The money under other parts or "amounts due in respect of customers' deposits" stood at CHF 126.22 million or Tk 1.88 billion in the last year.

The above figures did not include the amount deposited through the fiduciaries or wealth managers.

CHF 8.61 million or Tk 1.28 billion was deposited through the fiduciaries or wealth managers as Bangladesh-linked money.

The SNB statistics, however, did not mention anything about the nature of the money deposited in the banks in Switzerland. It is widely perceived that a large part of the deposits are stashed or black money or illegally-transferred wealth from different countries of the world.

Bangladesh Bank, a few years back, had prepared an explanatory note on Bangladesh-linked money in Swiss banks. It argued that around 10 per cent of such deposits were accounted for by individual clients while the amount was deposited by banks for trade-related transaction purposes.

Thus, according to the central bank, there is a very little amount of money actually stashed away from Bangladesh.

The official statistics released by the SNB also does not include the money that any Bangladesh-linked client of the Swiss banks might have deposited and kept in the name of shadow entities or shell companies.

2024 was a critical year for Bangladesh when the country witnessed a student-led mass uprising against the autocratic regime of Sheikh Hasina.

As the protest intensified in July last year, Hasina launched heavy repressive measures against the students and youths. As a result, around 1,400 people were killed brutally and many injured.

Hasina, as a prime minister, finally stepped down on August 5 and fled to Delhi for shelter.

The political turmoil in the first half of the year may drive many wealthy people and black money holders to perk their financial assets into a safe haven like Swiss banks.

Meanwhile, the total funds held by all foreign clients of the Swiss banks in 2024 declined further to CHF 977.12 billion from 983.45 billion in 2023. The total fund is the total liabilities of Swiss banks except fiduciaries' liabilities.

The SNB statistics also showed that Indians' direct deposits in Swiss banks in the last year jumped by 240 per cent to around CHF 3504.24 million from CHF 1029.84 million in 2023.

Pakistanis' money in Swiss banks dropped by around 5.0 per cent to CHF 271.67 million in 2024 as compared to CHF 285.76 million in the previous year. These figures, however, did not include deposits through the fiduciaries.

The Swiss banking system generally ensures full confidentiality of the depositors which turns the country into one of the largest tax havens in the world.

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