The government is set to allow Credit Suisse to launch banking operations in India, indicating that the political heat over black money stashed 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 regulators 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, moneylaundering 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 renewed demand in India for obtaining information from these banks.
According to government sources who do not want to be identified, the Reserve Bank has written to the finance ministry, seeking formal clearance for Credit Suisse to open a branch in Mumbai.
The department of financial services has also sought final approval from North Block, the sources said. The approval process is time-bound and will be cleared in due course if the finance ministry does not have objections, they added.
Credit Suisse currently has a presence in India through Credit Suisse First Boston (I) Securities and Credit Suisse Securities (I). Two foreign institutional investors (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 the securities business here since the two FIIs were registered in June.
The application of Credit Suisse to open a branch here was processed under the liberalised policy for presence of foreign banks in India that 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 banks from that country 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.
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