India’s rich hoarding away banknotes, gold and art works in Swiss deposit boxes in record numbers

July 2, 2012 – SWITZERLAND – Amid a global crackdown against alleged black money in secret accounts of Swiss banks, their bankers are selling a new safe-haven idea to their rich clients from India and other countries — the high-value 1,000 franc notes to be stored in safe deposit boxes. These boxes — kept inside the premises of Swiss banks — are also said to be being used to stash gold, diamond, paintings and art works among other valuables — apparently because of limited risk of catching the preying eyes of foreign governments having signed banking information exchange treaties with Switzerland. According to industry sources, bankers are telling their rich clients that Switzerland’s tax and information exchange treaties with India and other countries are mostly limited to funds in customers’ savings, deposit and investment accounts, and do not apply to the safe deposit boxes. As a result, the demand has soared to record high levels for the safe deposit boxes and the 1,000 Swiss franc banknotes in Switzerland, as rich of the world are rushing to get them. As per the data available with Switzerland’s central bank SNB (Swiss National Bank), the thousand-franc notes now account for 60 per cent of total value of all Swiss banknotes in circulation, up from about 50 per cent a year ago. Replying to PTI queries, SNB confirmed that there was a significant surge in demand for thousand-franc notes and admitted that this could be due to a trend to store the money and a higher demand was being noticed from abroad for these high-value currency notes. SNB did not reply to specific queries about demand from India and said that it did not have any data on deposit boxes. Just one thousand-franc banknote is worth about Rs 60,000 in Indian currency, making it easier to store large amount of money in form of these notes. –Business Standard