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India threatening criminal probe over black money: Swiss regulator

business Updated: Apr 04, 2015 16:31 IST
Sanjib Kr Baruah
Sanjib Kr Baruah
Hindustan Times
Switzerland banks


Switzerland’s topmost financial sector watchdog FINMA has said that India has “threatened” to launch criminal investigations if the Berne-based agency did not share details of unaccounted money stashed in secret bank accounts.

“Germany, France, Belgium and Argentina have followed the US in launching high-profile criminal investigations, while Israel and India are threatening to do so,” Swiss Financial Market Supervisory Authority or FINMA, the Alpine nation’s regulator for banks, insurance companies and financial market institutions, said in its latest annual report.

“FINMA is keeping a close eye on these proceedings, deploying both supervision and, where necessary, enforcement to ensure that banks adequately assess, manage and limit their legal and reputational risks in this area,” the report said.

The agency declined to share specific details about India’s communication with the Swiss regulator, but obliquely hinted that if found to have violated laws, it was open to crackdown on banks for hiding information.

“In general, FINMA does not comment on questions regarding international cooperation with particular countries,” FINMA spokesperson Vinzenz Mathys told HT in an emailed response.

“Swiss anti-money-laundering regulation sets out clear rules for the handling of client relationships with politically exposed persons. If FINMA is aware of institutions that do not comply with this regulation, it will take action in order to restore compliance with the law,” Mathys said.

“We have asked them (FINMA) very clearly to provide us full names and details in respect of the HSBC accounts,” a senior finance ministry official told HT, requesting not to be identified.

In October, the government had handed over to the Supreme Court a list of 628 entities whose names feature in a list of HSBC account holders in Geneva, which France had handed over to India in 2011.

Viewed as going hand in hand with corruption, “black money” has been a hot political issue.

Days after assuming office, the Narendra Modi-led government ordered setting up of a Special Investigation Team in line with a Supreme Court order last year.

The team’s mandate has since been expanded to also focus on the parallel economy thriving at home.

India has also offered a “cash reward” to Herve Falciani, a former HSBC Bank employee-turned-whistleblower, for securing fresh information on unaccounted money parked in foreign bank accounts.

The 43-year-old Paris-based Falciani has hinted that he has more information against Indians who have stowed away money in Switzerland and other principalities known for strong banking secrecy laws.