Experience of the polymer banknote technology in Vietnam

T H E N E W P A R A D I G M I N C U R R E N C YAUGUST 2006Experience of the polymerbanknote technology inVietnamThe first Guardian ® polymer circulating notes were introduced in Vietnam in December 2003 and since thenanother three denominations have been converted to polymer.IPCA spoke with Mr Nguyen Chi Thanh,Director at the Vault and Issue Department,State Bank of Vietnam.IPCA: What were the key drivers for thedecision of the State Bank of Vietnam toadopt the polymer banknote technology?Mr Thanh: During the period 1997-2000,banknote counterfeiting was considered as abig and complicated problem in Vietnam.Relevant authorities believed that most ofthe counterfeit banknotes were producedoverseas and transferred to Vietnam.Counterfeit banknotes, sometimes,appeared widely and became a seriousconcern in the society, which in turn, ruinedconfidence of the public in the nationalcurrency. In order to prevent and eliminatethis problem, the State Bank of Vietnamdeveloped a project that has allowed theissuance of several new banknote designsto replace the existing designs which werethe most counterfeited in circulation.In September 2000, the VND100,000 paperbanknotes were introduced to the public withimprovements in some security featuressuch as security thread, OVI feature, etc.This denomination was first counterfeited inMay 2001 and it had been simulated ratherperfectly. This fact proved that anothersolution must be taken and the polymerbanknote technology was chosen as oneoption among others for consideration.After a long process of studying, testing andapplying the new technology, we came to aconclusion that further improvements insecurity features on future paper banknotes(which might cost double the paperbanknotes in circulation at that time) wouldnot be sufficient to repel the counterfeiting. Itwill be more difficult to counterfeit abanknote printed on polymer substrate andit will be easier for the public to authenticatethe polymer banknote. In addition, polymerbanknotes are cleaner, with durability 3 to 4times greater than paper banknotes, whichin turn results in long-term benefits. Theseare the main reasons for the decision of theState Bank of Vietnam to adopt the polymertechnology.IPCA: What are the benefits of the polymerbanknotes for the community?Mr Thanh: Since late 2003 to date, the StateBank of Vietnam has issued the followingdenominations on polymer - VND50,000,VND500,000 (December 2003), VND100,000(September 2004) and VND20,000 (May 2006).The new polymer banknotes are well acceptedby the public. After nearly 3 years in circulation,Mr Nguyen Chi Thanh, Director at the Vaultand Issue Department, State Bank of Vietnamin public opinions, the polymer banknote iscleaner, more secure and more durable thanthe paper banknote. It should be emphasisedthat the number of counterfeits detectedthrough the banking system has reduceddramatically. Counterfeits of a polymerbanknote are easier to identify even withoutany inspection devices. In addition, accordingto the reports of the banks, no polymerbanknotes damaged or deformed undernormal circulation and storage conditions havebeen found so far (most of the distortion inpolymer banknotes is due to exposure of thenotes to a very high heat because consumers,Continued next page

Continued from previous pageat the beginning, were not familiar with thenew banknote material).IPCA: What have been the other benefits ofthe polymer banknotes in Vietnam?Mr Thanh: Thanks to the great support ofour partners, especially Securency Pty Ltd,we gradually managed the technique andtechnology and are able to successfullyproduce the polymer banknotes in ourpremises, ensure the quality of our productsat approved prime cost by good control ofthe spoilage rate and reorganisation ofproduction lines. Recently, we have beenindependently doing the origination andplate making for polymer banknotes and westrongly believe with the knowledge andexperience that we have learnt, we willachieve success in the new challenge wehave got in printing polymer banknotes.As previously mentioned, polymer banknoteshave great advantages compared to paperbanknotes, they are cleaner, more secureand more durable. Therefore, the usage ofpolymer banknotes, in the long term, willhelp to improve the quality of the notes incirculation, to make significant savings inproduction and issuance. Moreover, polymerbanknotes are robust and will help toimprove productivity and efficiency of notecounting, quality sorting and processingthrough the banking system and of thewhole society, especially given that Vietnamis using a great deal of cash and beingplaced in high humidity environments.Besides, polymer banknote issuance hasoffered an opportunity for the State Bank ofVietnam to restructure their currencyoperations so as to enhance the operationalefficiency of the issuer and improve thequality of the services provided by thebanking system. Now, we along withPolyTeQ and related parties have developeda project on this subject. This is also a partof the modernisation strategy of the StateBank of Vietnam to step up its integrationinto the world.IPCA: In view of your experience, what wouldbe your recommendation to other CentralBanks considering the polymer notetechnology?Mr Thanh: We believe that the polymertechnology and the benefits of polymerbanknotes have been proved not only inVietnam but also in other countries that haveused polymer banknotes. Therefore, anycountries that adopt this technology will enjoysimilar benefits from polymer banknotes.State Bank of Vietnam issues20,000 Dong polymer banknoteOn 17 May 2006, the State Bankof Vietnam issued VND20,000on polymer. This is the fourthdenomination the State Bank hasprinted on polymer substrate, afterVND50,000, 500,000 (2003) and100,000 issued in 2004.According to the State Bank of Vietnam’sNguyen Quang Toan (Deputy Director of theTreasury Department), the issuance of polymerVND20,000 is aimed at improving the security,quality and durability of notes in circulation.The aim to improve anti-counterfeiting and tomake the notes cleaner and more durable willsatisfy payment demands in the nationaleconomy and in addition, will also make agreat contribution in saving issuance costs ofbanknotes in the long term.The design of the polymer VND20,000 note is136mm x 65mm in size and the dominantcolour remains dark blue. Vietnam’s firstPresident Ho Chi Minh is featured on the frontof the note and Cau Pagoda, in the historictown of Hoi An, Quang Nam Province, is onthe back.The security features incorporated in thepolymer VND20,000 banknote include the clearwindow, emboss in window with numerals“20000”, shadow image of portrait PresidentHo Chi Minh, shadow image of a daisy,security thread and gold iridescent stripe.The current paper VND20,000 banknote willremain legal tender, however the central bankwill gradually remove it from circulation.Vietnam’s new VND20,000 polymer banknote

Polymer Centre of Excellence for securesubstrate and printing technologyConceptual drawing of the new Securency facility which will be completed in 2006With the rapidly growinginterest in secure polymertechnology, IPCA has prepared aprofile of the three co-locatedorganisations involved in itsdevelopment and production.The technology is recognised as anAustralian icon in the combat againstcounterfeiting and was developed by theReserve Bank of Australia (RBA) inconjunction with expertise from NotePrinting Australia and Australia’s peakscientific organisation, CSIRO. Thefacilities in Craigieburn were the testbed for the technology and spawnedthe birth of Securency as the globalsubstrate supplier and Innovia Filmsas the specialty film supplier.The benefits of having the threeorganisations in close proximity aresignificant - high security premises,high levels of interaction on R&Ddevelopments, excellent logistics andresponse times. Yet each have theirown unique profiles described here.Innovia FilmsInnovia Films uses a proprietary“bubble process” to produce specialtyBiaxially Oriented Polypropylene(BOPP) which is the base materialused successfully for polymerbanknotes in a full range of climaticand circulating conditions.The “bubble process” is the first stage of thepolymerisation of the banknote substrate,Guardian ® . It is a showpiece of engineeringexcellence and the result of over 30 years ofengineering innovation which continues today.It is highly automated with a sophisticated levelof control ensuring high quality is maintained.The bubble process imparts unique propertiesideal for banknote manufacture andperformance including flatness, stiffness anddimensional stability. This process is very cleanInnovia Films unique and proprietary “bubble process”produces high performance polymer for banknotesand highly efficient. Waste from the process isvery minor and is fully recycled.This process exists only at three sites globally;these are Melbourne, Australia, Wigton,United Kingdom and Merelbeke in Belgium.The Melbourne site is nested amongst NotePrinting Australia Ltd and Securency Pty Ltd.This location has resulted in an extremely short,efficient and responsive supply chain, frompolymer film through to finished banknote.Securency Pty LtdSecurency Pty Ltd is a joint venturebetween the Reserve Bank of Australia(RBA) and Innovia Films. Securency’score business is the production ofGuardian ® polymer substrate forbanknotes. This is supported by avigorous R&D program, focused onleading-edge innovative and overtsecurity features which can also beused in new generation substrates forsecurity documents and secure cards.Securency is the only supplier in theworld which has extensive experiencewith polymer banknote technology.The proven benefits of Guardian ®are superior security, cleanliness,functionality, machine processability,cost-effectiveness and recyclability.These facts have been proven overthe last decade with polymerbanknotes now having been issuedin 23 countries and global interest isgrowing rapidly.Continued next page

Continued from previous pageSecurency exports 95% of its productand due to this high global demand, a newmanufacturing plant is to be commissioned in2006 with consideration to establishing anotherplant overseas to meet further demand.Through the technical expertise of PolyTeQ ®Services, the technology transfer program toissuers and printers has been highly successful.Securency also specialises in other highsecurity substrates:• Sentinel ® substrate for secure documentsincluding land title certificates, academictranscripts and identification documents;and• SENTRII ® substrate for cards with uniqueand complex security features.Securency is accredited with internationallyrecognisedcredentials:• ISO 9001:2000 Quality ManagementSystem;• AS/NZS 4801:2001 Occupational Health &Safety Management Systems;• ISO 14001:2004 Standard EnvironmentalManagement System.Note Printing Australia LtdNote Printing Australia (NPA) is a whollyowned subsidiary of the RBA and wascorporatised in July 1998.NPA produced the first polymer banknote forAustralia in 1988 to celebrate Australia’sbicentenary. Since the introduction of polymerbanknotes there has been a marked reductionin the level of counterfeits and substantialbenefits in the areas of security, quality,cleanliness and cost effectiveness.The experience and knowledge gained frombanknote production has allowed NPA todiversify into other security documents.These include academic transcripts printedon Sentinel ® polymer substrate which areproduced for several major Australianuniversities. These new transcripts contain anumber of tamper-evident and anti-counterfeitsecurity features similar to polymer banknotes.Australia is a leader in the development ofbiometric passport technology and in October2005 became one of the first countries in theworld to introduce an ePassport. This newePassport, designed and manufactured atNPA, has an embedded microchip in thecentre page storing a digitised photograph andpersonal details that can be read electronically.The ePassport won a gold medal in thecategory ‘Innovation’ at The 23rd NationalPrint Awards.NPA is equipped with a state of the art design,prepress and printing capability and alsohouses the National Note Processing Centrewhich it operates on behalf of the RBA.NPA is accredited with the following standards:• ISO 9001:2000 Quality Management System;• AS/NZS 4801:2001 Occupational Health &Safety Management Systems.NPA’s ePassport – a gold medal winnerin “Innovation”International eventsConference Location Date Website20065th Asian High Security Printing Conference Kuala Lumpur, Malaysia September 12-14 www.cross-conferences.comAnnual meeting of the World Bank Group Singapore September 19-20 www.imf.organd IMFAfrican Banknote Printers Conference Kinshasa, Democratic October 10-13Republic of CongoATMIA Sec 2006 London, UK October 23-24 www.atmiaconferences.comBanknote Conference 2006 Washington, DC, USA November 5-8 www.banknote2006.comCartes 2006 Paris, France November 7-9 www.cartes.com2007Currency Conference Bangkok, Thailand May 6-9 www.currencyconference.comFor more industry news, polymer facts and currencyhot topics, look out for the next issue of IPCA Bulletin.Enquiries www.ipca.au.comBack issues of IPCA Bulletin can be foundon the IPCA website: www.ipca.au.com© Copyright 2006 International Polymer Currency Association. No partof this bulletin may be reproduced without prior consent from IPCA.ORIGINATION CRM SEC 038 0806