Nepalis parking wealth in Swiss banks

File – The Swiss National Bank (SNB) building is seen in Bern, Switzerland, on January 21, 2015. Photo: Reuters

Kathmandu, July 1

The Swiss National Bank — the central bank of Switzerland — has revealed the amount parked in Swiss banks from across the globe and funds parked in Swiss banks by Nepalis increased by nearly four-fold between 2008 and 2017. In 2008, Nepalis had parked 86.22 million Swiss francs in Swiss banks, while till the end of 2017 such funds rose to 322.88 million Swiss francs.

Based on the amount parked in the Swiss banks, Nepal ranks 109th among over 200 nations, with the United Kingdom, the United States of America, the West Indies, France and Germany taking the top five spots.

Though Nepali citizens are not allowed to transfer funds to foreign bank accounts, funds parked in Swiss banks have surprisingly been increasing. Compared to the previous year, funds parked by Nepalis in Swiss banks increased by nearly four per cent in 2017 to 322.88 million Swiss francs (Rs 35.72 billion).

Swiss banks maintain strict privacy of account holders, hence it is difficult to identify individuals parking funds in Swiss banks, but it is assumed that Nepali business people and politicians have been holding such accounts in Swiss banks.

“The money parked in Swiss banks is siphoned off illegally through hundi, over-invoicing in imports and other ways,” said economist Keshav Acharya. “The Panama Papers have enhanced the primacy of Swiss banks for holding secret funds from across the globe.”

The Panama Papers have revealed names of some Nepali businessmen parking funds in tax havens. Acharya said politicians, businessmen, bureaucrats, criminals and influential people who have gathered wealth through illegal means seek secret places to park funds and since Swiss banks are renowned for maintaining the secrecy of their clients it is natural for such people to park funds in Swiss banks.

“Wealth generated through bribery, tax evasion, ransom, human trafficking, drugs and arms/ammunition trafficking, smuggling and other illegal means could have been parked in Swiss banks,” Gandhi Pandit, a senior corporate lawyer told THT. “Such funds can be easily transferred to foreign banks through hundi and over-invoicing in imports.” Pandit added that remittances from Malaysia, the United Arab Emirates and South Korea are being tapped as hundi to invest abroad and park the illegally gathered wealth in Swiss banks.

“There are concerns about Swiss banks that they might have been parking illegal funds from across the globe and they are being pressured by the United States to maintain transparency to control money laundering activities.”