In a move aimed at saving billions of VND, the State Bank of Vietnam (SBV) has halted production of small denomination banknotes ahead of the coming Tet holiday.
Small denomination banknotes are popular for donations to temples or as lucky money, but do not remain in circulation after the holiday, causing increased costs for the SBV to collect and store the banknotes.
SBV to stop printing small banknotes for Tet
Nguyen Chi Thanh, director of issue and the vault department, said the SBV would not print new banknotes in denominations of VND500, VND1,000, VND2,000 and VND5000, the third consecutive year it has halted production of small change.
The SBV said it had ample supplies of the notes already on hand to meet demand over the holiday period.
"The SBV can save hundreds of billion of VND so we hope to have support from the people to use money reasonably," Thanh said.
SBV Vice Governor Dao Minh Tu said the bank saved some VND1trn since it stopped printing new banknotes three years ago.
People usually donate small banknotes to pagodas after worship in hope of attracting good luck. The tradition is being criticised because, instead of putting the money into donation boxes, people tend to leave on statues or even throw it on the ground.
Tu said it cost the SBV more than VND300bn a year to print new small banknotes. Only a small amount was needed for actual transactions, the bulk left sitting in vaults until needed for holiday festivals.
In 2012, pagodas in My Duc District, Hanoi collected some 1,200 sacks of small banknotes with a face value of VND20bn (USD960,000). It took 10 trucks to collect all the currency.
