India concerned over nations not sharing past banking data

Concerned over the decision of certain nations not to share their past banking information, India today asked the OECD to revisit its legal framework to effectively put an end to the era of banking secrecy.

Finance Minister Pranab Mukherjee also made a case for stepping up multilateral cooperation to deal with "abusive" transfer pricing mechanism that is robbing developing nations of their scarce natural resources.

He said this at a two-day seminar on international taxation, jointly organised by his ministry and the Organisation for Economic Cooperation and Development (OECD), a 34-member grouping of developed and developing countries.

"While the countries have accepted to end bank secrecy in general, some countries have agreed to do so only from a prospective date and are not willing to exchange past banking information," Mukherjee said, regretting that banking system was still opaque in various non-tax and low tax jurisdictions.

The minister, however, did not name the nations, which are reluctant to share past banking information.

"This puts a question mark on the efficacy of present legal provisions for exchange of banking information. There is an urgent need to revisit existing legal framework developed by the OECD in this regard," the minister said.

Referring to the issue, OECD Secretary General Angel Gurria said that although substantial progress have been made in last 18 months and over 600 agreements have been signed, "there are some issues which are difficult like the question of retro activity".

This, Gurria admitted, "is a real impediment in many cases."