Assistant Governor's speech at the launching of RM5 polymer bank note

Speakers: Assistant Governors / Advisers

Venue: Auditorium, Bank Negara Malaysia

Date: 26.10.04

Language: English

Bismillahirrahmanirahim,

Y.Bhg Dato' Halipah Esa,

Timbalan Ketua Setiausaha Perbendaharaan,

Kementerian Kewangan,

Tuan Haji Wan Mansoor bin Wan Omar,

Pengarah Bahagian Hal Ehwal Pengguna,

Kementerian Perdagangan dan Hal Ehwal Pengguna,

Honored Members of the Notes and Coins Advisory Committee (NCAC),

Distinguished guests,

Members of the media,

Ladies and gentlemen,

Assalamualaikum, dan selamat sejahtera.

Allow me to first welcome you on this occasion to mark the introduction of the RM5 polymer banknotes, the first of its kind to be issued as banknotes in circulation in Malaysia.

Beginning today, a total of 80 million pieces of RM 5 polymer banknotes would be available for distribution and circulation nation wide. Bank Negara Malaysia through our office and branch network and all commercial banks have made the necessary logistic arrangements to ensure that members of the public will be able to obtain sufficient supply of the new polymer notes.

With the introduction of the RM5 polymer banknote, Bank Negara Malaysia will also from today discontinue the issuance of RM5 paper banknote for circulation. As at today Bank Negara Malaysia has issued a total of 120 million pieces of RM5 paper banknotes, which will continue to be legal tender and continue in circulation until this particular denomination of paper banknotes is fully withdrawn over time. Bank Negara Malaysia has made sufficient procurement of RM5 polymer bank notes to ensure an orderly, gradual and ultimately complete replacement of RM5 paper banknotes from circulation.

The RM5 polymer banknotes are similar to the existing RM5 paper banknotes in design, color and size. Some of the existing security features in the RM5 paper banknotes are also retained, but few critical changes were made to incorporate security features that are unique to polymer banknotes, to enhance the overall security level of the denomination.

The unique feel of polymer substrate itself will make new RM5 distinguishable, and therefore serves as an important authentication feature for the public. I would like to mention here the two most easily recognizable new security features incorporated in the RM5 polymer banknote that members of the public should be aware of. These security features are only possible through the use of polymer substrate.

They are; firstly: a clear window with the shadow image of the Prime Minister's Office at Putrajaya; and secondly: an opaque or non-transparent window on the back of the banknote, with a Kijang logo.

With today's introduction, Malaysia joins a group of 18 countries around the world that have adopted the polymer banknote technology, and issue polymer banknotes for both circulation and commemorative purposes in the past 15 years since this banknote technology was commercialized. In addition, there are 5 other countries that have issued commemoratives polymer banknotes. There are currently about 5.3 billion pieces of circulating polymer banknotes in the world which is roughly about 5% of total world's banknotes-in-circulation. Malaysia had in fact initially used this technology in 1998, when Bank Negara Malaysia issued a limited number of RM50 polymer banknotes to commemorate the Sixteenth Commonwealth Games hosted by our country in that year.

Ladies and Gentlemen,

The adoption of polymer banknote technology will increase our portfolio of technological options. Bank Negara Malaysia's decision to issue RM5 polymer banknotes is a significant strategic move to further diversify our sources of banknotes procurement, supplementing our existing policy and practice of procuring paper banknotes from multiple suppliers. We have benefited from the high degree of price competition among banknotes suppliers, driven mainly by the current consolidation taking place within the industry and production overcapacity among banknote printers worldwide. The adoption of polymer technology by Malaysia will certainly enhance the healthy competitive elements in our bank note procurement processes in particular, and currency supply chain management processes in general.

Ladies and Gentlemen,

The substrate on which RM5 polymer banknotes are printed, is made of an oil-based plastic film and produced using a proprietary process with specialized equipment which makes this product not commercially available. Some of the security features of RM5 polymer notes are incorporated during the process of substrate production, while others during the printing process. The process of printing RM5 polymer banknotes are similar to that of paper banknotes, after which the banknotes are treated with layers of protective varnish. We expect RM5 polymer banknotes to maintain high level of durability and retain their quality while in circulation. They should have a significantly extended lifetime as the RM5 polymer banknotes do not absorb dirt or liquids, stay clean and hygienic to handle. The over-coating varnish should also add to cleanliness, protect the printing, reduce ink rub-off or ink wear, and ink dust, under a normal condition of usage and handling.

An effective "clean note policy" in this country could promote a high sense of pride among our people in our national currency, which could encourage the desired positive attitude and behavior in the handling of notes in day-to-day activities. High quality notes facilitate manual and machine-assisted notes processing. The unique feel of polymer notes which are stronger, more rigid, cleaner and with minimal damage could make manual counting, validating, sorting, and packing a lot easier, faster and with less errors. Polymer notes which are in good condition feed into machine better, keep machine sensors clean and functional without causing unnecessary machine breakdown, which could lead to more efficient and effective notes processing at banks, retail centers, Cash In Transit companies, and other cash handlers' ends. With enhanced machine processability of RM5 polymer banknotes, we hope to see some forms of process reengineering taking place within the industry, with significant productivity and efficiency gains.

Ladies and Gentlemen,

We expect the public at large will respond positively to the introduction of RM5 polymer banknotes. For the past several weeks preceding today's launching, substantial collaborative work has been undertaken by the officers of Bank Negara Malaysia, financial institutions, major retailers, consumer associations, Cash In Transit companies, and other commercial entities with significant cash processing activities. I would like to take this opportunity to thank all parties involved. More activities and collaboration will take place in the coming weeks and months, focusing on distribution and public education. I ask your continuous support and participation in this program.

With the introduction of the RM5 polymer banknote at this juncture of time, we hope to bring a little bit of excitement to Malaysians, our children especially, during the coming Hari Raya, Deepavali, Christmas and Chinese new year festive seasons, when they find new, crisp RM5 polymer banknotes in their customary duit raya, ang pau or gift packets. On that note ladies and gentlemen, may I now invite you to join me in this simple celebration to mark the official launching of RM5 polymer banknotes.