Many expect the Indian government’s efforts to trace black money squirelled away in bank accounts abroad to get a boost soon, now that it’s about to gain possession this month of the first tranche of data being shared by Switzerland under an automatic information exchange framework. According to a news report, the dataset has been prepared by all Switzerland-based banks and has details of cash flow to and from all the accounts that were active even for a single day in 2018. The hope is that this information will help nab Indians who had unaccounted money in those accounts. India will have a record of deposits, transfers and all earnings, including the money made off investments.
The trouble is, this may have come too late in the day. Swiss banks gained notoriety decades ago as places to keep funds hidden from the prying eyes of government authorities, and that very fame has meant that prudent tax evaders have sought and found alternatives across the globe. The truth is that Swiss banks have long ceased to be the hot destination for ill-gotten gains. Moreover, very little illegal money stays put in some sort of deposit nowadays. It is invested in a byzantine network of global investment funds. This makes the recovery of such money nigh impossible, and the proper identification of real owners difficult.
Of course, the data to be shared could still be useful. A significant part of the information being shared is reportedly related to accounts that have been closed recently, and these could serve as leads. Switzerland is to be thanked. But the battle against black money remains riddled with complexities—and holes, a la Swiss cheese.