Small banknotes limited in circulation
  • | tienphong, | December 27, 2013 08:23 PM

The State Bank of Vietnam said they will set a limit for printing new small banknotes because of the high cost of making them and their proliferation of use at pagodas.

Normally, the SBV prints more small banknotes before Tet, but in reality, only a small amount of them are used for trade. The rest are used for religious donations then returned to bank vaults. Last year, pagodas in My Duc District, Hanoi collected about 1,200 sacks of small banknotes that were worth 20 billion (USD959,000). The bank had to sent 10 trucks to carry the money.


People push inside the glass 

In Vietnam tradition, people usually donate small banknotes to pagodas after worship, wishing for luck. However, this tradition is being criticised of late because, instead of putting the money into donation boxes, people tend to leave it haphazardly, placing on the statues or even throwing on the ground.


Ground strewn with money 

Many monks have also commented that worshipers should use fewer banknotes. "Huong Pagoda in Hanoi's My Duc District is often strewn with small change and the wells and lakes of Hung Kings' Temple in Phu Tho Province is also covered with small money. I think people should use one or two bigger banknotes to donate instead of throwing small change everywhere," said the deputy head of SBV, Dao Minh Tu.

Tu went on to say that it it costs more than VND300 billion each year for printing new small banknotes, causing more waste to the budget.

The decision has created new opportunities in the black market. One trader operating from Nguyen Xi Street, in Hanoi asked for a VND300,000 'service fee for customers who wanted to change VN500,000 into VND500 notes. "The VND500 notes are becoming rare, so I don't have very many. The banks only issue this note near Tet," the trader said.


 Changing denominations becomes service

This service is also bustling on internet, with many attractive offers such as low fees for high value changes or free delivery.

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