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LUCTOR E. TAPIHERUDirector
Currency Management Department - Bank Indonesia
International Seminar on Currency Management Systems, Yogyakarta, September 26th 2017
EVOLUTION OF BANKNOTE DESIGN: AN INDONESIAN CASE
2
I. Introduction
II. Indonesia’s Currency System
III. Design for Rupiah Old Series
IV. Issuance of 2016 Series
V. Lessons Learned
VI. Challenges Ahead / Next Step
AGENDA
3
The Mandate
To satisfy the public needs of Rupiah currency according to the nominal value as well as denomination, timely and of the high quality of currency throughout the archipelago.
1 2 3 4 5 6
Coordination with
Government
PLANNING(Art. 13)
PRINTING(Art. 14)
ISSUANCE(Art. 15)
CIRCULATION(Art. 16)
DESTRUCTION(Art. 18)
REVOCATION& WITHDRAWAL
(Art. 17)
Mandate from Currency Act :
To satisfy the public needs of Rupiah currency according to the nominal value as well as denomination, timely and high quality of the currency throughout the archipelago.
I. Introduction
Act No. 23/1999 regarding Bank Indonesia Act No. 7/2011 regarding Currency
4
I. IntroductionIndonesia at a Glance
Economic Condition (2016)
• Growth: 5.02%• Inflation: 3.02%• GDP : $923
billions
Network
• BI Headquarter
• 46 BI Branches
• 87 Cash Custodies
Currency in Circulation
2016• Rp612.5 trillion• Banknotes: 17 billion • Coins:
20 billion
Notes & Coins Printing
2016• Banknotes:
8.5 billion• Coins:
2.0 billion
Geographic and Demographic Condition
• Total Island: 17.504• Island inhabited:
±6.000 • Population: >261
million
6
II. Indonesia’s Currency System
Currency in Circulation
0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
600
700
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
% UYDRp. triliun CiV CoB % UYD, yoy
0
100
200
300
400
500
600
700
800
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
2014 2015 2016 2017
Rp. triliunUPK UK 20000 UK 50000 UK 100000
Currency in Indonesia consist of :- 7 banknotes (Rp100.000, 50.000, 20.000, 10.000, 5.000, 2.000, 1.000)- 4 coins (Rp1.000, 500, 200, 100)
Currency in Circulation - value: Rp612,5 trillion (as of Dec 2016)- 17 billion banknotes and 20 billion coins
Source: Bank Indonesia, 2017
7
II. Indonesia’s Currency System
Currency in Circulation – Comparison with Other Countries
NegaraCAGR*)‘04-15
Projection next 10 years
Growth Rates
Pop. Growth
HK 8,4% 91% 90%
SIN 7,2% 73% 46%
KOR 12,1% 33% 31%
INA 14,9% 99% 93%
THA 10,3% 122% 117%
PHI 10,9% 113% 111%
Source: AGIS Consulting (The Future of Cash An Asian Perpective 2017)
In value, cash in circulation has grown at the compound annual growth rate of 15% over the period of2005-2015.
The growth in Indonesia is quite high compare with our neighbouring countries.
8
III. Design for Rupiah Old Series
1945• Japanese (Dai Nippon),
• Dutch Indies (Gulden),
• De Javasche Bank
1946• ORI (Oeang
Repoeblik Indonesia) Series
1950• Republik
Indonesia Serikat (RIS) Series
12
1979 -1999
2000 -
2016
III. Design for Rupiah Old Series
13
IV. Issuance of 2016 Series
Architecure of Strategic Function of BI
Background and Policy Context
TURNING POINTS
Established Centralized Cash
Network Planning
END STATE
(Objective)
High-quality of all denominations of Rupiah banknotes
throughout the archipelago
CURRENT STATE
(Challenges)
Design is not comply to Currency Act
Low quality of currency in circulation
Limitation of cash network and coverage
Standard for cash processing for CiT/CMC
Vault capacity Availability of sorting machine
Board of Governor announced the Transformation Program of Bank
Indonesia in 2014, particularly transformation in currency
management determined in 3 pillars: Enhanced Quality of of Rupiah, Currency Circulation, and Cash
Services.
TRANSFORMATION FRAMEWORK
14
Previous banknotes and coins did not comply to Currency Act
The effectiveness of blind code needs to be enhanced.
The effectiveness of current security features need to be enhanced
Consider the redenomination policy in the future
Theme, design and lay out are not STANDARD
Main Issues in Rupiah Notes and Coins
IV. Issuance of 2016 Series
15
What to Consider in Design Process
IV. Issuance of 2016 Series
Material/Substrate
Theme/
Picture
Design Aesthetic
Security Features
• Same theme for all denominations
• Avoid public controversy
• Consider Property Right
• Easy to verify
• Difficult to counterfeit
• Durable
• Easy to apply
• Cost effectiveness
• Durability
• Security
• Cost Effectiveness
• Public behavior in handling cash
• Color selection
• Banknotes/Coin Size
• Design Layout
16Link to Movie
Denomination Old Series Design Theme
Rp100.000 (2004)
Indonesian Parliament Building
Rp50.000(2005)
View of Beratan Bedugul Lake
Rp20.000(2004)
Tea Harvesting Activities
Rp10.000(2005)
Limas Traditional House
Rp5.000(2001)
Traditional Knitting/Weaving Activities
Rp2.000(2009)
Dayak Dance
Rp1.000(2000)
View of Maitara –Tidore Island
Rupiah Old Series wasissued with differentdesign/theme for eachdenomination.
IV. Issuance of 2016 Series
17
• Research
• Decision to Issue New Series
Sept 2015
• Board of Governor meeting
• Coordination with Government
Nov - Dec 2015
•Collecting Data
•Design Phase
•Procurement
Jan – Jun 2016
• Zero Production
• Communication strategy
Jul – Sep 2016• Mass production
• Machine Calibration
• Distribution
Oct – Dec 2016
• Issue new Rupiah Series 2016
19 Dec 2016
Preparation Phase for Issuing Rupiah Series 2016
IV. Issuance of 2016 Series
Launch 7 banknotes + 4 coins at one time
Less than 1,5 year preparation
Communication Issues
Achievements
18
Public, Expert, Prominent Figures, Associations,
Families
Government of Indonesia
Perum Peruri(Printing Co)
Law Enforcement Agency
IV. Issuance of 2016 Series
Who We Coordinate With
Retailers, Machine suppliers, Financial Institutions
19
IV. Issuance of 2016 Series
Design Front Side: Indonesian National Hero
The inclusion of National Hero image in Rupiah is mandated by Currency Act as a tribute to their patrioticand heroic as well as their extraordinary services for the Indonesian state and people.
Bank Indonesia coordinates with Government of Indonesia, historian, scholars and experts to selectNational Hero with criteria as follows: the image never been depicted in previous Rupiah series,represent all Indonesian area, and fully accepted by public.
20
IV. Issuance of 2016 Series
Design Rear Side: The Beauty of Indonesia
Derawan
Bromo Mountain
Banda Neira
Raja Ampat
Wakatobi
Komodo Island
Ngarai Sianok
Consists of over 17,000 unique islands, Indonesia's archipelago proudly exhibits natural beauty that isunique and promote the uniqueness of Indonesian tourism.
Bank Indonesia coordinates with Ministry of Tourism and experts to select beautiful places thatrepresent Indonesian natural wonders.
22
IV. Issuance of 2016 Series
Design Rear Side: Indonesian Traditional Dance
Tari Gong
Tari Gambyong
Tari TifaTari Pakarena
Tari Legong
Tari Piring
Tari Topeng Betawi
Indonesian traditional dance reflects the diversity of culture from ethnic groups thatcomposed the nation of Indonesia.
Bank Indonesia coordinates with Ministry of Education and Culture, scholars and experts toselect traditional dances that will represent Indonesian rich culture.
23
IV. Issuance of 2016 Series
Rp100.000Raja Ampat
(West Papua)
Dr. (H.C.) Ir. Soekarno
(1901-1970)
Dr. (H.C.) Drs. Mohammad Hatta
(1902-1980)
Traditional Dance
Topeng Betawi (Jakarta)
Watermark
Signatures of Governor
and Minister of Finance
Total changes on the design
In the new series of Rupiah, we had totally changed the design. We used Indonesian nationalheroes as main image and captured the cultural heritage of Indonesia, such as: our traditionaldance, national scenery, floral and fauna, that represent all parts of Indonesia.
25
BI’s Governor firstly used Rupiah
series 2016 in the local market
President Jokowi, BI Governor, and
Minister of Finance launched 2016
Series
Link to Movie
People in Papua (remote area) has the
new Rupiah Series 2016
Public can easily get the new
2016 series
IV. Issuance of 2016 Series
26
IV. Issuance of 2016 Series
26
Total changes and the common
design for all denominations.
Comply the Currency Act, such as:
The main pictures are national
heroes
Under signed by Ministry of
Finance and Governor of Bank
Indonesia
Using existing substrates/blanks
Enhanching existing security
features (such as: flourosencent,
rainbow, IR, OVI, laten image,
rectoverso)
New Series of
Rupiah ?
Enhanching blind code features
Consider possibility of the
implementation of
Redenemination Policy
9
19 December 2016The first currency issuance in Indonesian history
that launched New Series of Rupiah with 11 (denominations) at one time.
27
V. Lessons Learned
What We Have Learned??
• Uniformity in design/theme
• Security feature robustness
• Counterfeit deterrence
• Preparation Stages is Crucial
• Stakeholder Engagement
Project and Coordination
Product
OperationCommunication
• Comm. Strategy• Multi channel
Media (Internet, Youtube, Posters, Brochure)
• Production schedule w/ Peruri
• Timely distribution
28
VI. Challenges Ahead
Challenges...
1
2
Enhance public awareness to security features
Increase law enforcement against counterfeiters
3 Enhance durability and quality of banknotes and coins in circulation
4 The possibility of REDENOMINATION’s policy