India will have to ensure strict confidentiality of information about its citizens’ Swiss bank accounts received through the new automatic exchange window, failing which the Alpine nation will stop sharing the data.
Switzerland and its banks will also keep a close watch on the data protection measures taken by India regarding the details received from other jurisdictions and want all other global financial centres to implement the global framework for automatic exchange of information (AEOI) on financial matters.
On Friday, the Swiss Federal Council ratified the AEOI with India and 40 other jurisdictions to facilitate immediate sharing of details about suspected black money.
The pact with India would not be subject to referendum and is planned for implementation in 2018, with the first set of data to be exchanged in 2019.
Bankers in Switzerland said this rollout plan will give them enough time to study the implementation by other global financial centres and the adherence to confidentiality and data protection requirements by India and other recipients.
They also clarified this exercise would be followed not just for India, but all countries with which Switzerland will share banking information under the automatic route.
Switzerland competes with Singapore, Dubai, Hong Kong, london and New York among the major global financial hubs.
Black money issue has been a political hot potato for long and the Indian government has stepped up its efforts in recent years to clamp down on this menace. These efforts have included hectic parleys with the Swiss authorities.
With its long-standing banking secrecy walls crumbling in under global pressure, Switzerland has finally agreed to share tax information on automatic basis with several countries including India, but wants adherence to strict data protection and privacy requirements.
Officials from the Switzerland Government and leading groupings of Swiss banks told PTI that data protection and a level playing field need to be ensured by India and other jurisdictions with whom the AEOI regime would be implemented.