Swiss banks lure clients with gold accounts, cash vaults
Swiss banks are selling a new safe-haven idea to the rich and mighty from India and other countries -- special accounts for holding gold bars and high- value Swiss franc notes in the safety of their cash vaults.
Geneva: Swiss banks are selling a new safe-haven idea to the rich and mighty from India and other countries -- special accounts for holding gold bars and high- value Swiss franc notes in the safety of their cash vaults.
Amid a global crackdown against alleged illicit wealth in secret accounts of Swiss banks, these new products claim to offer safety from the snooping eyes of regulators and tax authorities from the home countries of the rich foreign clients of banks operating from Switzerland.
Speaking on condition of anonymity, several Swiss bankers present at the recently held World Economic Forum Annual Meeting in Davos said these gold accounts and cash vaults are being lapped up by the rich clients from across the world, including those from India.
As a result, some of the large banks have already hiked the fees for these gold accounts and the safe deposit boxes, which are also being used to store valuables like gold, diamond, paintings and other art works, a top Swiss banker said.
The bankers claimed that these safe deposit vaults are being lapped up because of limited risk of catching the prying eyes of the foreign governments having signed banking information exchange treaties with Switzerland.
None of the banks were ready to offer official comments on this trend, despite repeated attempts, although their officials admitted that they have successfully approached with these products many of their rich clients, including during the WEF summit.
The bankers said they are telling their rich clients that Switzerland's tax and information exchange treaties with India and other countries are mostly limited to funds in the 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 61 percent of total value of all Swiss banknotes in circulation, up from about 50 percent in 2011.
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.
The total value of thousand-franc notes currently in circulation is over Rs two trillion (35 billion Swiss francs).
Also, Switzerland is among the few major countries to have denomination of as high as 1,000, while the highest value banknotes in the UK and the US are only 50 pounds (about Rs 4,300) and 100 dollars (Rs 5,500), respectively.