PAPUA NEW GUINEA - [Home] - Polymer Bank Notes of the World

BANK OF PAPUANEW GUINEATHE CHALLENGES FORBANKNOTES INPAPUA NEW GUINEA1Regional Polymer Banknote SymposiumHanoi, Vietnam15-16 December 2005

PAPUA NEW GUINEA• Papua New Guinea (PNG) is anindependent nation in the Oceaniaregion just to the north of Australia• It is made up of several islands thatare mostly mountainous with coastallowlands and rolling foothills• PNG has a tropical climate with warmtemperatures and plenty of rain2

THE CHALLENGESFOR BANKNOTESIN PNG9

USE OF BANKNOTES INTRANSACTIONS• Barter trading and traditional currencies(mainly shell monies) are a traditional part ofthe PNG economy• However the majority of people now use cashas the main form of payment in settling theirtransactions• Banknotes therefore have to be widelyacceptable and convenient to handle -attempts must be made to have relatively cleansupplies of notes in circulation at all times10

SECURITY OF THE NOTESIN CIRCULATION• Security enhancement of the currency isparamount in protecting the notesagainst counterfeiting• The people have to have the confidenceand trust that they are using a safe,secure and reliable currency to conducttheir transactions12

NOTE QUALITY• With the warm, humid climate and thefrequent and rough handling of the notesby the people the notes in circulation aresubjected to a high level of “wear andtear”13

RETURN OF NOTES• With limited banking and financialservices where the majority of PNGpeople live, especially in the rural,highlands and island areas, notes tend toremain in circulation outside the bankingsystem for long periods of time14

COST EFFECTIVENESS• Given the high humidity conditions inPNG’s tropical climate and the frequentand rough handling of currency by thepeople, the Bank of PNG needs toprovide a currency that is not onlyreliable to use but also cost effective toproduce, with enhanced modern securityfeatures against counterfeiting15

TECHNOLOGICALADVANCEMENT• Technological advancement and changeshave meant that PNG has to continuouslyupgrade its currency to adapt to the newtechnological changes• PNG now has Automatic Teller Machinesand the banknotes have to meet themachine standards and requirements16

POLYMER BANKNOTESIN PNG17

POLYMER BANKNOTES IN PNG• To help meet the challenges for banknotes inPNG and to provide notes with a high level ofsecurity, good quality in circulation with anextended lifetime the Bank of PNG decided in1991 to introduce polymer banknotes• 2 Kina polymer note issued in 1991• 50 Kina in 1998• 10 Kina in 1999• 20 Kina in 2003• New 100 Kina in November 200518

POLYMER BANKNOTES IN PNG• The design elements of the notessymbolise PNG’s national identity, nationbuilding and national unity• Central theme runs through the note series- the use of money for trade and otheractivities, as was the case in traditionaltimes• Features on the notes are well known andare easily recognised by the people19

POLYMER BANKNOTES IN PNG• The new K100 note has a very interesting design• The National Crest and the National ParliamentBuilding appear on the front of the note tosymbolise nationhood and unity• Designs on the back of the note tracedevelopments over 30 years in agriculture,fishing, forestry, oil and gas, mining, tourism,transportation and communication and othertechnological developments24

POLYMER BANKNOTES IN PNG• All of the polymer notes have a range ofeffective security features includingclear/complex windows that are easy forpeople to recognise• The logo of the Bank of PNG is an image inthe window of all of the notes and alsoappears on each note as a shadow image26

Clear/ComplexWindowBPNG Logo in theWindow27BPNG LogoShadow Image

POLYMER BANKNOTES IN PNG• The new K100 note has a range of “state of theart” polymer security features to provide a highlevel of security for this denomination• Security features on the K100 note include:– Clear/complex Window– “G” Switch Feature– ICE Feature– Emboss Feature– IRIDIN Feature– DOE Feature28

29“G” SWITCH

CLEAR/COMPLEX WINDOWS30

EMBOSS FEATURE31

IRIDIN FEATURE32

“ICE” FEATURE33

THE BENEFITS OFPOLYMER BANKNOTESIN PNG34

BENEFITS OFPOLYMER BANKNOTES IN PNG• The decision to introduce polymerbanknotes in PNG was based on:– Extended durability of the polymer notes– Cleanliness of the notes– Notes are more difficult to counterfeit• The people of PNG appreciate that thepolymer notes are clean and more durable35

BENEFITS OFPOLYMER BANKNOTES IN PNG• The notes stand up better to continuoushandling and “wear and tear” in circulationand retain their structure and functionality• The notes remain clean and hygienic tohandle• They work well in the “market” basedeconomy in PNG where the people use thenotes for the purchase of a wide range offood items36

BENEFITS OFPOLYMER BANKNOTES IN PNG• The 2 Kina notes are the most frequentlyused denomination• It used to take the 2 Kina paper note anaverage of four months from issue towithdrawal and there was a problem withpoor quality notes in circulation• The 2 Kina polymer note now lasts up to 14months37

382 KINA POLYMERNOTES FROMCIRCULATION

BENEFITS OFPOLYMER BANKNOTES IN PNG• The considerably longer lifetime for all of thepolymer notes in circulation provides costeffective currency and note purchase costssavings for the Bank of PNG• Because the polymer notes are difficult tocounterfeit there have been very few attempts atcounterfeiting the polymer denominations• The few counterfeit notes have been producedon paper39

BENEFITS OFPOLYMER BANKNOTES IN PNG• The people of PNG are familiar with thenotes in circulation and the features on thenotes. The Bank of PNG regularly remindsthe public and cash handlers of these inthe media and at fairs and exhibitions• People are confident with using the notesfor their “day to day” transactions for thepurchase of goods and services40

BENEFITS OFPOLYMER BANKNOTES IN PNG• In PNG the polymer notes have beenproven to be secure and to retain theirquality while in circulation• The notes can remain in circulation forextended periods of time - this is importantespecially in the rural areas with limitedbanking facilities41

BANK OF PNGFUTURE STRATEGY42

BANKNOTEQUALITY STANDARD• As the polymer notes in PNG retain theirintegrity and structure there is a tendencyto extend their circulation life even whenthe notes have performed very well and areshowing signs of ink wear• To overcome this problem the Bank of PNGhas developed a quality standard for thenotes• The quality standard provides informationand guidelines for the quality evaluation43and quality sorting of notes in PNG

BANKNOTEQUALITY STANDARD• The quality standard helps ensureconsistency of the quality of the notes incirculation• Quality sorting of notes, based on thequality standard, ensures notes aremaintained in a clean and undamagedcondition44

BANKNOTEQUALITY STANDARD• The quality standard helps maintain thenotes in circulation at a level of quality thatensures the notes meet the needs andexpectations of all note users in regards toappearance, cleanliness and ease ofhandling as well as ensuring efficientautomated processing of notes45

EFFICIENCY INITIATIVES• As the polymer notes retain thefunctionality of the security features andthe note quality is maintained at a highlevel over an extended period of time thenotes have a much longer lifetime incirculation• Notes do not have to be consistentlyreturned to the Bank of PNG forauthenticity validation and quality sorting47

EFFICIENCY INITIATIVES• The Bank of PNG is undertaking a reviewof the note distribution and depositsystems in PNG with a view to makingsignificant efficiency improvements inhandling, processing and distribution ofnotes• The polymer notes provide a catalyst and atool to promote efficiency and costeffectiveness with benefits to allparticipants in the currency cycle48

RISK MANAGEMENT• Security and risk management are keyobjectives when handling and processinglarge volumes of banknotes• The Bank of PNG is introducing a riskreview program for all of its CurrencyOperations work systems and processes49

RISK MANAGEMENT• This will involve a review of each workprocess and identifying tasks andoperations• Risks will be identified and appropriateprocesses and security controlsimplemented• Skills based training will be provided tosupport the enhanced work systems andprocesses50

NOTE PERFORMANCEEVALUATION PROGRAM• A note data analysis and reporting modelis being developed and implemented tomonitor note performance and currencyoperations• The model includes note sample analysisand note data statistical/trend analysis51

NOTE PROCESSINGAUTOMATION• The Bank of PNG is currently assessing theoptions for automated processing of notes andlooking for a suitable note-processing machine• With good quality polymer notes in circulationautomated processing of the notes for counting,authenticity validation and quality sorting can beintroduced to further improve the efficiency ofcurrency operations52

BANK OF PAPUANEW GUINEATHE CHALLENGES FORBANKNOTES INPAPUA NEW GUINEATHANK YOU53