New banknotes with denominations lower than VN?5,000 will not be issued for the Lunar New Year by the State Bank of Viet Nam to save money. Officials claimed that this denomination was largely used for donations and not for transactions during this festive season. Vietnamese donate money in small denominations to pagodas and temples as per Tet tradition to bring in luck in the New Year.
New, small denomination banknotes like VN?500, VN?1,000 and VN?2,000 has not been printed since 2013, which saved almost VN?2.2 trillion for the State budget. This move has been taken positively by the public as well.
The central bank has plans to work with relevant ministries and agencies to manage note exchange services more effectively. Illegal note exchange services can be fined between VN?20 and 40 million.
Branches of Central Bank have been asked to review the cash demand with enough cash to supply to the local State treasuries and credit institutions during the festive season of Tet holidays that begins on 15th February. Credit institutions with ATMs have been asked to ensure that demand for cash withdrawals is met.