Lens on over 3,000 foreign accounts of high net-worth Indians

NEW DELHI: Monitoring foreign bank accounts of high net-worth individuals (HNIs) has gone up substantially during the last two years of the Modi government with more than 3,000 requests sent to foreign countries seeking banking transactions of specific Indian account holders.
Though many of these request for information pertain to ongoing investigation in multiple scams and the probe related to the HSBC Geneva case, the government has widened its net to include more individuals and entities to look through passive entities, such as shell companies and trusts, to expose individuals that ultimately control these entities.
In addition, under a special arrangement with the US, tax authorities have received information about Indian residents having high-value financial transactions in the US for calendar year 2014, which is currently being analysed. The government believes this will help get details about unaccounted money hoarded abroad and enable its actual repatriation.
The information-sharing arrangement with the US provides that financial institutions (FIs) of a country report these data to its government and then it is shared between two nations. The FIs include banks, investment vehicles and insurance companies. The set of information from the US was received in September last year and includes account details where the minimum balance is $10,00,000 (Rs 6.8 crore). As part of the agreement, the Indian government has also collected information from its FIs and transmitted them to the US.
During the UPA regime, between 2008-09 and 2010-11 the number of requests, seeking suspected financial transactions of Indians abroad, remained less than 100 in any given year, but they started going up when the Supreme Court took up monitoring of the CBI probe in the 2G scam. The highest such requests sent by the UPA government was 600 and 700 in 2012-13 and 2013-14, respectively. This was an increase considering between 2008-09 and 2010-11 the requests ranged between 39 and 92.
However, in 2014-15 and 2015-16, the requests for accounts information were 1,679 and 1,359, respectively. India has worked out pacts with several other countries similar to the one it has with the US for the automatic exchange of information. It has committed to a deadline of September 2017 when the first exchange of information is to take place with at least 58 countries and tax jurisdictions.
The first exchange would include information about new accounts opened after January 1, 2016, and for pre-existing (as on December 31, 2015) individual high-value accounts with balance of more than $10,00,000.