Experience of the polymer banknote technology in Vietnam
Experience of the polymer banknote technology in Vietnam
Experience of the polymer banknote technology in Vietnam
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T H E N E W P A R A D I G M I N C U R R E N C YAUGUST 2006<strong>Experience</strong> <strong>of</strong> <strong>the</strong> <strong>polymer</strong><strong>banknote</strong> <strong>technology</strong> <strong>in</strong><strong>Vietnam</strong>The first Guardian ® <strong>polymer</strong> circulat<strong>in</strong>g notes were <strong>in</strong>troduced <strong>in</strong> <strong>Vietnam</strong> <strong>in</strong> December 2003 and s<strong>in</strong>ce <strong>the</strong>nano<strong>the</strong>r three denom<strong>in</strong>ations have been converted to <strong>polymer</strong>.IPCA spoke with Mr Nguyen Chi Thanh,Director at <strong>the</strong> Vault and Issue Department,State Bank <strong>of</strong> <strong>Vietnam</strong>.IPCA: What were <strong>the</strong> key drivers for <strong>the</strong>decision <strong>of</strong> <strong>the</strong> State Bank <strong>of</strong> <strong>Vietnam</strong> toadopt <strong>the</strong> <strong>polymer</strong> <strong>banknote</strong> <strong>technology</strong>?Mr Thanh: Dur<strong>in</strong>g <strong>the</strong> period 1997-2000,<strong>banknote</strong> counterfeit<strong>in</strong>g was considered as abig and complicated problem <strong>in</strong> <strong>Vietnam</strong>.Relevant authorities believed that most <strong>of</strong><strong>the</strong> counterfeit <strong>banknote</strong>s were producedoverseas and transferred to <strong>Vietnam</strong>.Counterfeit <strong>banknote</strong>s, sometimes,appeared widely and became a seriousconcern <strong>in</strong> <strong>the</strong> society, which <strong>in</strong> turn, ru<strong>in</strong>edconfidence <strong>of</strong> <strong>the</strong> public <strong>in</strong> <strong>the</strong> nationalcurrency. In order to prevent and elim<strong>in</strong>atethis problem, <strong>the</strong> State Bank <strong>of</strong> <strong>Vietnam</strong>developed a project that has allowed <strong>the</strong>issuance <strong>of</strong> several new <strong>banknote</strong> designsto replace <strong>the</strong> exist<strong>in</strong>g designs which were<strong>the</strong> most counterfeited <strong>in</strong> circulation.In September 2000, <strong>the</strong> VND100,000 paper<strong>banknote</strong>s were <strong>in</strong>troduced to <strong>the</strong> public withimprovements <strong>in</strong> some security featuressuch as security thread, OVI feature, etc.This denom<strong>in</strong>ation was first counterfeited <strong>in</strong>May 2001 and it had been simulated ra<strong>the</strong>rperfectly. This fact proved that ano<strong>the</strong>rsolution must be taken and <strong>the</strong> <strong>polymer</strong><strong>banknote</strong> <strong>technology</strong> was chosen as oneoption among o<strong>the</strong>rs for consideration.After a long process <strong>of</strong> study<strong>in</strong>g, test<strong>in</strong>g andapply<strong>in</strong>g <strong>the</strong> new <strong>technology</strong>, we came to aconclusion that fur<strong>the</strong>r improvements <strong>in</strong>security features on future paper <strong>banknote</strong>s(which might cost double <strong>the</strong> paper<strong>banknote</strong>s <strong>in</strong> circulation at that time) wouldnot be sufficient to repel <strong>the</strong> counterfeit<strong>in</strong>g. Itwill be more difficult to counterfeit a<strong>banknote</strong> pr<strong>in</strong>ted on <strong>polymer</strong> substrate andit will be easier for <strong>the</strong> public to au<strong>the</strong>nticate<strong>the</strong> <strong>polymer</strong> <strong>banknote</strong>. In addition, <strong>polymer</strong><strong>banknote</strong>s are cleaner, with durability 3 to 4times greater than paper <strong>banknote</strong>s, which<strong>in</strong> turn results <strong>in</strong> long-term benefits. Theseare <strong>the</strong> ma<strong>in</strong> reasons for <strong>the</strong> decision <strong>of</strong> <strong>the</strong>State Bank <strong>of</strong> <strong>Vietnam</strong> to adopt <strong>the</strong> <strong>polymer</strong><strong>technology</strong>.IPCA: What are <strong>the</strong> benefits <strong>of</strong> <strong>the</strong> <strong>polymer</strong><strong>banknote</strong>s for <strong>the</strong> community?Mr Thanh: S<strong>in</strong>ce late 2003 to date, <strong>the</strong> StateBank <strong>of</strong> <strong>Vietnam</strong> has issued <strong>the</strong> follow<strong>in</strong>gdenom<strong>in</strong>ations on <strong>polymer</strong> - VND50,000,VND500,000 (December 2003), VND100,000(September 2004) and VND20,000 (May 2006).The new <strong>polymer</strong> <strong>banknote</strong>s are well acceptedby <strong>the</strong> public. After nearly 3 years <strong>in</strong> circulation,Mr Nguyen Chi Thanh, Director at <strong>the</strong> Vaultand Issue Department, State Bank <strong>of</strong> <strong>Vietnam</strong><strong>in</strong> public op<strong>in</strong>ions, <strong>the</strong> <strong>polymer</strong> <strong>banknote</strong> iscleaner, more secure and more durable than<strong>the</strong> paper <strong>banknote</strong>. It should be emphasisedthat <strong>the</strong> number <strong>of</strong> counterfeits detectedthrough <strong>the</strong> bank<strong>in</strong>g system has reduceddramatically. Counterfeits <strong>of</strong> a <strong>polymer</strong><strong>banknote</strong> are easier to identify even withoutany <strong>in</strong>spection devices. In addition, accord<strong>in</strong>gto <strong>the</strong> reports <strong>of</strong> <strong>the</strong> banks, no <strong>polymer</strong><strong>banknote</strong>s damaged or deformed undernormal circulation and storage conditions havebeen found so far (most <strong>of</strong> <strong>the</strong> distortion <strong>in</strong><strong>polymer</strong> <strong>banknote</strong>s is due to exposure <strong>of</strong> <strong>the</strong>notes to a very high heat because consumers,Cont<strong>in</strong>ued next page
Cont<strong>in</strong>ued from previous pageat <strong>the</strong> beg<strong>in</strong>n<strong>in</strong>g, were not familiar with <strong>the</strong>new <strong>banknote</strong> material).IPCA: What have been <strong>the</strong> o<strong>the</strong>r benefits <strong>of</strong><strong>the</strong> <strong>polymer</strong> <strong>banknote</strong>s <strong>in</strong> <strong>Vietnam</strong>?Mr Thanh: Thanks to <strong>the</strong> great support <strong>of</strong>our partners, especially Securency Pty Ltd,we gradually managed <strong>the</strong> technique and<strong>technology</strong> and are able to successfullyproduce <strong>the</strong> <strong>polymer</strong> <strong>banknote</strong>s <strong>in</strong> ourpremises, ensure <strong>the</strong> quality <strong>of</strong> our productsat approved prime cost by good control <strong>of</strong><strong>the</strong> spoilage rate and reorganisation <strong>of</strong>production l<strong>in</strong>es. Recently, we have been<strong>in</strong>dependently do<strong>in</strong>g <strong>the</strong> orig<strong>in</strong>ation andplate mak<strong>in</strong>g for <strong>polymer</strong> <strong>banknote</strong>s and westrongly believe with <strong>the</strong> knowledge andexperience that we have learnt, we willachieve success <strong>in</strong> <strong>the</strong> new challenge wehave got <strong>in</strong> pr<strong>in</strong>t<strong>in</strong>g <strong>polymer</strong> <strong>banknote</strong>s.As previously mentioned, <strong>polymer</strong> <strong>banknote</strong>shave great advantages compared to paper<strong>banknote</strong>s, <strong>the</strong>y are cleaner, more secureand more durable. Therefore, <strong>the</strong> usage <strong>of</strong><strong>polymer</strong> <strong>banknote</strong>s, <strong>in</strong> <strong>the</strong> long term, willhelp to improve <strong>the</strong> quality <strong>of</strong> <strong>the</strong> notes <strong>in</strong>circulation, to make significant sav<strong>in</strong>gs <strong>in</strong>production and issuance. Moreover, <strong>polymer</strong><strong>banknote</strong>s are robust and will help toimprove productivity and efficiency <strong>of</strong> notecount<strong>in</strong>g, quality sort<strong>in</strong>g and process<strong>in</strong>gthrough <strong>the</strong> bank<strong>in</strong>g system and <strong>of</strong> <strong>the</strong>whole society, especially given that <strong>Vietnam</strong>is us<strong>in</strong>g a great deal <strong>of</strong> cash and be<strong>in</strong>gplaced <strong>in</strong> high humidity environments.Besides, <strong>polymer</strong> <strong>banknote</strong> issuance has<strong>of</strong>fered an opportunity for <strong>the</strong> State Bank <strong>of</strong><strong>Vietnam</strong> to restructure <strong>the</strong>ir currencyoperations so as to enhance <strong>the</strong> operationalefficiency <strong>of</strong> <strong>the</strong> issuer and improve <strong>the</strong>quality <strong>of</strong> <strong>the</strong> services provided by <strong>the</strong>bank<strong>in</strong>g system. Now, we along withPolyTeQ and related parties have developeda project on this subject. This is also a part<strong>of</strong> <strong>the</strong> modernisation strategy <strong>of</strong> <strong>the</strong> StateBank <strong>of</strong> <strong>Vietnam</strong> to step up its <strong>in</strong>tegration<strong>in</strong>to <strong>the</strong> world.IPCA: In view <strong>of</strong> your experience, what wouldbe your recommendation to o<strong>the</strong>r CentralBanks consider<strong>in</strong>g <strong>the</strong> <strong>polymer</strong> note<strong>technology</strong>?Mr Thanh: We believe that <strong>the</strong> <strong>polymer</strong><strong>technology</strong> and <strong>the</strong> benefits <strong>of</strong> <strong>polymer</strong><strong>banknote</strong>s have been proved not only <strong>in</strong><strong>Vietnam</strong> but also <strong>in</strong> o<strong>the</strong>r countries that haveused <strong>polymer</strong> <strong>banknote</strong>s. Therefore, anycountries that adopt this <strong>technology</strong> will enjoysimilar benefits from <strong>polymer</strong> <strong>banknote</strong>s.State Bank <strong>of</strong> <strong>Vietnam</strong> issues20,000 Dong <strong>polymer</strong> <strong>banknote</strong>On 17 May 2006, <strong>the</strong> State Bank<strong>of</strong> <strong>Vietnam</strong> issued VND20,000on <strong>polymer</strong>. This is <strong>the</strong> fourthdenom<strong>in</strong>ation <strong>the</strong> State Bank haspr<strong>in</strong>ted on <strong>polymer</strong> substrate, afterVND50,000, 500,000 (2003) and100,000 issued <strong>in</strong> 2004.Accord<strong>in</strong>g to <strong>the</strong> State Bank <strong>of</strong> <strong>Vietnam</strong>’sNguyen Quang Toan (Deputy Director <strong>of</strong> <strong>the</strong>Treasury Department), <strong>the</strong> issuance <strong>of</strong> <strong>polymer</strong>VND20,000 is aimed at improv<strong>in</strong>g <strong>the</strong> security,quality and durability <strong>of</strong> notes <strong>in</strong> circulation.The aim to improve anti-counterfeit<strong>in</strong>g and tomake <strong>the</strong> notes cleaner and more durable willsatisfy payment demands <strong>in</strong> <strong>the</strong> nationaleconomy and <strong>in</strong> addition, will also make agreat contribution <strong>in</strong> sav<strong>in</strong>g issuance costs <strong>of</strong><strong>banknote</strong>s <strong>in</strong> <strong>the</strong> long term.The design <strong>of</strong> <strong>the</strong> <strong>polymer</strong> VND20,000 note is136mm x 65mm <strong>in</strong> size and <strong>the</strong> dom<strong>in</strong>antcolour rema<strong>in</strong>s dark blue. <strong>Vietnam</strong>’s firstPresident Ho Chi M<strong>in</strong>h is featured on <strong>the</strong> front<strong>of</strong> <strong>the</strong> note and Cau Pagoda, <strong>in</strong> <strong>the</strong> historictown <strong>of</strong> Hoi An, Quang Nam Prov<strong>in</strong>ce, is on<strong>the</strong> back.The security features <strong>in</strong>corporated <strong>in</strong> <strong>the</strong><strong>polymer</strong> VND20,000 <strong>banknote</strong> <strong>in</strong>clude <strong>the</strong> clearw<strong>in</strong>dow, emboss <strong>in</strong> w<strong>in</strong>dow with numerals“20000”, shadow image <strong>of</strong> portrait PresidentHo Chi M<strong>in</strong>h, shadow image <strong>of</strong> a daisy,security thread and gold iridescent stripe.The current paper VND20,000 <strong>banknote</strong> willrema<strong>in</strong> legal tender, however <strong>the</strong> central bankwill gradually remove it from circulation.<strong>Vietnam</strong>’s new VND20,000 <strong>polymer</strong> <strong>banknote</strong>
Polymer Centre <strong>of</strong> Excellence for securesubstrate and pr<strong>in</strong>t<strong>in</strong>g <strong>technology</strong>Conceptual draw<strong>in</strong>g <strong>of</strong> <strong>the</strong> new Securency facility which will be completed <strong>in</strong> 2006With <strong>the</strong> rapidly grow<strong>in</strong>g<strong>in</strong>terest <strong>in</strong> secure <strong>polymer</strong><strong>technology</strong>, IPCA has prepared apr<strong>of</strong>ile <strong>of</strong> <strong>the</strong> three co-locatedorganisations <strong>in</strong>volved <strong>in</strong> itsdevelopment and production.The <strong>technology</strong> is recognised as anAustralian icon <strong>in</strong> <strong>the</strong> combat aga<strong>in</strong>stcounterfeit<strong>in</strong>g and was developed by <strong>the</strong>Reserve Bank <strong>of</strong> Australia (RBA) <strong>in</strong>conjunction with expertise from NotePr<strong>in</strong>t<strong>in</strong>g Australia and Australia’s peakscientific organisation, CSIRO. Thefacilities <strong>in</strong> Craigieburn were <strong>the</strong> testbed for <strong>the</strong> <strong>technology</strong> and spawned<strong>the</strong> birth <strong>of</strong> Securency as <strong>the</strong> globalsubstrate supplier and Innovia Filmsas <strong>the</strong> specialty film supplier.The benefits <strong>of</strong> hav<strong>in</strong>g <strong>the</strong> threeorganisations <strong>in</strong> close proximity aresignificant - high security premises,high levels <strong>of</strong> <strong>in</strong>teraction on R&Ddevelopments, excellent logistics andresponse times. Yet each have <strong>the</strong>irown unique pr<strong>of</strong>iles described here.Innovia FilmsInnovia Films uses a proprietary“bubble process” to produce specialtyBiaxially Oriented Polypropylene(BOPP) which is <strong>the</strong> base materialused successfully for <strong>polymer</strong><strong>banknote</strong>s <strong>in</strong> a full range <strong>of</strong> climaticand circulat<strong>in</strong>g conditions.The “bubble process” is <strong>the</strong> first stage <strong>of</strong> <strong>the</strong><strong>polymer</strong>isation <strong>of</strong> <strong>the</strong> <strong>banknote</strong> substrate,Guardian ® . It is a showpiece <strong>of</strong> eng<strong>in</strong>eer<strong>in</strong>gexcellence and <strong>the</strong> result <strong>of</strong> over 30 years <strong>of</strong>eng<strong>in</strong>eer<strong>in</strong>g <strong>in</strong>novation which cont<strong>in</strong>ues today.It is highly automated with a sophisticated level<strong>of</strong> control ensur<strong>in</strong>g high quality is ma<strong>in</strong>ta<strong>in</strong>ed.The bubble process imparts unique propertiesideal for <strong>banknote</strong> manufacture andperformance <strong>in</strong>clud<strong>in</strong>g flatness, stiffness anddimensional stability. This process is very cleanInnovia Films unique and proprietary “bubble process”produces high performance <strong>polymer</strong> for <strong>banknote</strong>sand highly efficient. Waste from <strong>the</strong> process isvery m<strong>in</strong>or and is fully recycled.This process exists only at three sites globally;<strong>the</strong>se are Melbourne, Australia, Wigton,United K<strong>in</strong>gdom and Merelbeke <strong>in</strong> Belgium.The Melbourne site is nested amongst NotePr<strong>in</strong>t<strong>in</strong>g Australia Ltd and Securency Pty Ltd.This location has resulted <strong>in</strong> an extremely short,efficient and responsive supply cha<strong>in</strong>, from<strong>polymer</strong> film through to f<strong>in</strong>ished <strong>banknote</strong>.Securency Pty LtdSecurency Pty Ltd is a jo<strong>in</strong>t venturebetween <strong>the</strong> Reserve Bank <strong>of</strong> Australia(RBA) and Innovia Films. Securency’score bus<strong>in</strong>ess is <strong>the</strong> production <strong>of</strong>Guardian ® <strong>polymer</strong> substrate for<strong>banknote</strong>s. This is supported by avigorous R&D program, focused onlead<strong>in</strong>g-edge <strong>in</strong>novative and overtsecurity features which can also beused <strong>in</strong> new generation substrates forsecurity documents and secure cards.Securency is <strong>the</strong> only supplier <strong>in</strong> <strong>the</strong>world which has extensive experiencewith <strong>polymer</strong> <strong>banknote</strong> <strong>technology</strong>.The proven benefits <strong>of</strong> Guardian ®are superior security, cleanl<strong>in</strong>ess,functionality, mach<strong>in</strong>e processability,cost-effectiveness and recyclability.These facts have been proven over<strong>the</strong> last decade with <strong>polymer</strong><strong>banknote</strong>s now hav<strong>in</strong>g been issued<strong>in</strong> 23 countries and global <strong>in</strong>terest isgrow<strong>in</strong>g rapidly.Cont<strong>in</strong>ued next page
Cont<strong>in</strong>ued from previous pageSecurency exports 95% <strong>of</strong> its productand due to this high global demand, a newmanufactur<strong>in</strong>g plant is to be commissioned <strong>in</strong>2006 with consideration to establish<strong>in</strong>g ano<strong>the</strong>rplant overseas to meet fur<strong>the</strong>r demand.Through <strong>the</strong> technical expertise <strong>of</strong> PolyTeQ ®Services, <strong>the</strong> <strong>technology</strong> transfer program toissuers and pr<strong>in</strong>ters has been highly successful.Securency also specialises <strong>in</strong> o<strong>the</strong>r highsecurity substrates:• Sent<strong>in</strong>el ® substrate for secure documents<strong>in</strong>clud<strong>in</strong>g land title certificates, academictranscripts and identification documents;and• SENTRII ® substrate for cards with uniqueand complex security features.Securency is accredited with <strong>in</strong>ternationallyrecognisedcredentials:• ISO 9001:2000 Quality ManagementSystem;• AS/NZS 4801:2001 Occupational Health &Safety Management Systems;• ISO 14001:2004 Standard EnvironmentalManagement System.Note Pr<strong>in</strong>t<strong>in</strong>g Australia LtdNote Pr<strong>in</strong>t<strong>in</strong>g Australia (NPA) is a whollyowned subsidiary <strong>of</strong> <strong>the</strong> RBA and wascorporatised <strong>in</strong> July 1998.NPA produced <strong>the</strong> first <strong>polymer</strong> <strong>banknote</strong> forAustralia <strong>in</strong> 1988 to celebrate Australia’sbicentenary. S<strong>in</strong>ce <strong>the</strong> <strong>in</strong>troduction <strong>of</strong> <strong>polymer</strong><strong>banknote</strong>s <strong>the</strong>re has been a marked reduction<strong>in</strong> <strong>the</strong> level <strong>of</strong> counterfeits and substantialbenefits <strong>in</strong> <strong>the</strong> areas <strong>of</strong> security, quality,cleanl<strong>in</strong>ess and cost effectiveness.The experience and knowledge ga<strong>in</strong>ed from<strong>banknote</strong> production has allowed NPA todiversify <strong>in</strong>to o<strong>the</strong>r security documents.These <strong>in</strong>clude academic transcripts pr<strong>in</strong>tedon Sent<strong>in</strong>el ® <strong>polymer</strong> substrate which areproduced for several major Australianuniversities. These new transcripts conta<strong>in</strong> anumber <strong>of</strong> tamper-evident and anti-counterfeitsecurity features similar to <strong>polymer</strong> <strong>banknote</strong>s.Australia is a leader <strong>in</strong> <strong>the</strong> development <strong>of</strong>biometric passport <strong>technology</strong> and <strong>in</strong> October2005 became one <strong>of</strong> <strong>the</strong> first countries <strong>in</strong> <strong>the</strong>world to <strong>in</strong>troduce an ePassport. This newePassport, designed and manufactured atNPA, has an embedded microchip <strong>in</strong> <strong>the</strong>centre page stor<strong>in</strong>g a digitised photograph andpersonal details that can be read electronically.The ePassport won a gold medal <strong>in</strong> <strong>the</strong>category ‘Innovation’ at The 23rd NationalPr<strong>in</strong>t Awards.NPA is equipped with a state <strong>of</strong> <strong>the</strong> art design,prepress and pr<strong>in</strong>t<strong>in</strong>g capability and alsohouses <strong>the</strong> National Note Process<strong>in</strong>g Centrewhich it operates on behalf <strong>of</strong> <strong>the</strong> RBA.NPA is accredited with <strong>the</strong> follow<strong>in</strong>g standards:• ISO 9001:2000 Quality Management System;• AS/NZS 4801:2001 Occupational Health &Safety Management Systems.NPA’s ePassport – a gold medal w<strong>in</strong>ner<strong>in</strong> “Innovation”International eventsConference Location Date Website20065th Asian High Security Pr<strong>in</strong>t<strong>in</strong>g Conference Kuala Lumpur, Malaysia September 12-14 www.cross-conferences.comAnnual meet<strong>in</strong>g <strong>of</strong> <strong>the</strong> World Bank Group S<strong>in</strong>gapore September 19-20 www.imf.organd IMFAfrican Banknote Pr<strong>in</strong>ters Conference K<strong>in</strong>shasa, Democratic October 10-13Republic <strong>of</strong> CongoATMIA Sec 2006 London, UK October 23-24 www.atmiaconferences.comBanknote Conference 2006 Wash<strong>in</strong>gton, DC, USA November 5-8 www.<strong>banknote</strong>2006.comCartes 2006 Paris, France November 7-9 www.cartes.com2007Currency Conference Bangkok, Thailand May 6-9 www.currencyconference.comFor more <strong>in</strong>dustry news, <strong>polymer</strong> facts and currencyhot topics, look out for <strong>the</strong> next issue <strong>of</strong> IPCA Bullet<strong>in</strong>.Enquiries www.ipca.au.comBack issues <strong>of</strong> IPCA Bullet<strong>in</strong> can be foundon <strong>the</strong> IPCA website: www.ipca.au.com© Copyright 2006 International Polymer Currency Association. No part<strong>of</strong> this bullet<strong>in</strong> may be reproduced without prior consent from IPCA.ORIGINATION CRM SEC 038 0806