Credit Suisse to launch banking operations in India

Credit suisse the swiss bank will be now having its first branch in India in Mumbai. The government is all set to allow Credit Suisse to launch banking operations in India, indicating that the political heat over black money away in Swiss bank accounts would not come in the way of providing market access to such banks in the country. A final nod is expected from the finance ministry soon as key regulators like RBI and Sebi have already conveyed to the government that they have no objection to Credit Suisse setting up a branch in Mumbai.

Before the general elections earlier this year, BJP president LK Advani had said thousands of crores of Indian money hidden in Swiss banks should be brought back. Recently, the Swiss authorities said India cannot simply ask for bank account details, and information would be provided only on the basis of concrete evidence—obviously related to bribes, tax evasion, money laundering or links to ill-gotten wealth. The US government recently managed to obtain information on nearly 4,000 accounts from Swiss banks and this resulted in a renewed demand in India for obtaining information from these banks.

Credit Suisse now has presence in India through Credit Suisse First Boston (I) Securities and Credit Suisse Securities (I). Two FIIs of the group were registered with Sebi in June this year. RBI has concluded that Sebi does not have regulatory discomfort with Credit Suisse’s arms dealing with securities business here since the two FIIs were registered in June.

The application of Credit Suisse to open a branch in Mumbai was processed under the liberalised policy for presence of foreign banks in India which was brought into play in 2005, the sources said. The final clearance from the finance ministry for Credit Suisse would mean political clearance for Swiss banks in India, paving the way for other Swiss banks to get a foothold in India if they comply with regulatory requirements.

At the same time, efforts will continue to obtain information from Swiss banks in cases where evidence is available to show unaccounted Indian money hidden there.

So will this help Indian authorities in a way to get all the black money details by allowing foreign banks to operate in the country, which will improve camaraderie with both the Indian and Swiss governments.