What's the Swiss money hullabaloo all about?

Indian money stashed in the Swiss Bank has become a major plank for Lok Sabha elections, after the Leader of Opposition and the Bharatiya Janata Party's prime ministerial candidate L K Advani raised the issue. If elected, the BJP has vowed to bring the black money back home. Though the Congress dismissed the idea, the Swiss bank issue has become a hot election issue. What's the Swiss money hullabaloo all about? The Swiss financial hub is one of the largest in the world. It is sometimes accused of harboring dirty money due to its bank secrecy. Swiss bankers are under obligation to keep any information about you or your account strictly confidential.This bank secrecy is among the strictest in the world and stems from an age-old historical tradition.
Taking advantage of the secrecy clause, affluent sections from across the board, including politicians, artistes, professionals and politicians, stash huge amounts of unaccounted money in Swiss banks. Even the money generated from gun smuggling, dug trafficking, etc reportedly flow into Swiss banks.
With recent changes in the Swiss bank secrecy regime, other states such as Singapore have attracted depositors seeking privacy and protection. Having taken steps to make its banks more attractive, Singapore strengthened penalties for violators of bank secrecy (and now imposes steeper fines and longer jail sentences for offenders) and modified its laws on trusts and inheritance.
There are presumably more than 70 tax havens in the world. Indian wealth could be more in Switzerland and various British /US islands. Kickbacks from major defense/civilian contracts, smuggling of gold and illegal money, transactions done abroad and not reported in India, hawala funds, funds earned by artists/entertainment industry /sports people, etc are believed to have been stashed abroad.
Unofficial estimates suggest that Indian money deposited secretly with banks could run to about $1,400 billion (Rs 70,00,000 crore)
It goes to the credit of NDA's prime ministerial candidate L K Advani to turn the spotlight on the issue of getting back the Indian money stashed in swiss banks.
Adding to his list of pre-poll promises, Advani said he would bring the Indian money deposited secretly in Swiss banks and other tax havens across the world back, in case his party got a chance to rule the country after the Lok Sabha elections.
He said the return of Indian money deposited secretly with banks abroad would be a key issue in the BJP’s campaign.
The BJP’s idea is to link the plank of “Indian money in foreign banks” with its agenda for development during the campaigning. The BJP points out that estimated Indian wealth in foreign banks is enough to relieve the debts of all farmers and the landless; is sufficient to lay highways and roads across the country; provide Rs 4 crore to each of the 600,000 Indian villages, etc.
To emphasise the BJP’s seriousness on the issue, Advani even announced his proposal to set up a national task force which would be entrusted with the task of outlining an action plan for seeking return of the Indian money from abroad. The proposed task-force would comprise R Vaidyanathan of IIM-Bangalore, S Gurumurthy of the Sangh Parivar, lawyer Mahesh
Jethmalani and former Intelligence Bureau chief Ajit Doval.
The Congress camp hit back at BJP leader L K Advani who claimed of receiving an "evasive" reply to his demand on bringing back money stashed in foreign banks, saying the saffron leader's charge was "farther from truth".
In a signed statement, Union Home Minister P Chidambaram said he himself had written to Advani in his capacity as Finance Minister in 2008 informing him about the steps taken by the Government on the matter.
"Nothing can be farther from the truth. When Government noticed a news report datelined Berlin/Frankfurt on February 26, 2008, the Ministry of Finance wrote to Federal Central Tax Office in Germany on February 29, 2008 seeking information relating to Indian taxpayers who may have accounts with Lichenstein's LGT bank.
"Since then, the matter has been pursued diligently by the Ministry of Finance," the statement said, adding "my reply (to Advani) was direct, clear and unambiguous. As anyone can see, there was nothing 'evasive' about my reply".
Chidambaram said the finance ministry had taken up the issue with the Federal Central Tax Office, Bonn, in February last year and the matter was pursued diligently since then. "I understand that the matter continues to be pursued diligently by the ministry of finance with the German authorities," he added.
The government apparently has no clues about the legal procedure for getting back the black money deposited in foreign banks. Even countries like United States, Germany and France which are keen to fight the recessionary blues, could not make much headway in tracking the money deposited in foreign banks.With the largest Swiss bank UBS AG in a showdown with the U.S. government over wealthy American tax evaders, Switzerland's federal government has been dealt the unenviable task of avoiding sanctions abroad while gently burying the myths at home it has helped create about confidential banking. "I cannot imagine how we could abolish banking secrecy," Swiss President Hans-Rudolf Merz said. "It's part of the social idea, the mentality of our country. It's the protection of privacy. I don't see any reason why we should give up banking secrecy", Merz said a day after a U.S. Senate committee blasted UBS for evasive answers on about 50,000 American-held accounts Washington is interested in. Switzerland has yet to decide on a strategy for dealing with US investigators or equally impatient authorities in Europe.
The best that India can do is to put the issue on global agenda. It has to vigourously pursure the matter with internatinal organisations such as G-20 and IMF.
Foreign secretary Shiv Shankar Menon claims that India is working for greater transparency in the functioning of foreign banks in dealing with secretive bank accounts. "I can say that we are working for greater transparency in these cases. But I don't think we have come to a final decision yet on how to do it or which is the best way to approach it," he said.