KATHMANDU, NOVEMBER 23: “Pampha Devi, give back the money you hold in Swiss banks!” This was one of the prime slogans raised during the People’s Movement in 1992. By raising it, the participants of the movement were implicitly alleging that the then queen Aishwarya Rajya Laxmi Devi Shah had secretively stashed away a large amount of cash in Swiss banks under the very fictitious name of Pampha Devi.
Over the course of time, the very slogan has lost its relevance. However, a linguistic allusion to “depositing money in Swiss banks” continues to be pertinent in today’s context of Nepal. This is because a number of the political, bureaucratic and business tycoons indeed do have their furtive account in these institutions
Some two years back, there were news reports about over two-fold increment in the money deposited by Nepali nationals in the banks in a year. According to the reports, the amount of such bucks increased to Rs 46.64 billion in 2020 from Rs 22.73 billion in 2019. These banks tend to refrain from disclosing the identities of the account holders citing the need to maintain a high degree of confidentiality. So, the actual names of such holders from Nepal depositing money could not be ascertained. But what was beyond the doubt that hundreds of politicians, bureaucrats, and businesspeople of higher levels possessed astronomical amounts of money under fake names in Swiss banks
That these banks deal with wealth earned from criminal activities like corruption, money laundering tax evasion, human and drug trafficking, etc, is an open secret.
Swiss banks on the brink
Lately, reports that these financial organisations with shady reputations are facing severe crises have been doing rounds. According to the Swiss Bankers’ Association, their gross profits declined by 13.3 percent (Approximately US $ 7.2 billion) in 2022. Moreover, USB is reported to be financially crippled because of taking over Credit Suisse, the second-large bank in Switzerland, that collapsed on March 23.
Why so?
There are two major reasons behind the current gloomy state of the Swiss banking industry
First, the US has been strictly implementing its Foreign Account Tax Compliance Act (FATCA) which requires financial institutions of foreign countries, including Switzerland, to report on the foreign assets held by its citizens. With this, apart from the US, Swiss banks are also losing international clients from the Middle East and Asia. Not only this, even the attraction of their own domestic clients towards these banks is fading due to various documents related to the FATCA.
Second, Swiss banks blocked the accounts of Russians following the onset of the Russia-Ukrain war. The very decision, made mainly to please the US and European authorities supporting Ukraine, proved costly to them. It spooked away wealthy clients not only from Russia but also from various other Asian countries. This fact was admitted by none other than Boris Collardi, a well-known Swiss-Italian banker. In his recent interview with the Finance Times he said, “As a gesture of approval to the anti-Russian policies of the EU, Switzerland directed its banks to be harsh towards the Russian clients. With this, the Asian clients shifted their deposits from these banks to those based in Dubai and the Middle East.”
Conclusion
As stated above, a sizable number of the rich and powerful people of Nepal have sneakily parked billions of rupees in Swiss banks. So, the severe financial turmoil being faced by them is surely not good news for these “Pampha Devis”.
