The popular practice of exchanging new or special banknotes for a fee kicked off several weeks ago in many big cities, with one month to go before the start of Tet (Lunar New Year).

Every year, people use new or special banknotes as “lucky money” or charity offerings when they visit the pagoda during the Lunar New Year holiday.

Weeks before Tet, families begin to prepare for the tradition by buying new or special banknotes.

The notes are often freely exchanged by banks, but due to high demand, services in the black market have become even busier.

The note-exchange services are often also offered near pagodas, but this year social media networks like Facebook have become popular destinations as well.

Buyers can easily find websites online offering the services. Notes in high demand are those of smaller denominations, such as VND500, VND1,000, VND2,000, VND 5,000 and VND10,000.

The website www.doitienmoi.net, which offers a new money-exchange service, has told customers that it now has enough new money for all notes from VND500 to VND200,000 (US$8.7), with a service charge ranging from 0.6 per cent to 50 per cent (for notes of VND500).  

The website offers its services in all provinces and cities in the southern region.

In HCM City’s Tan Binh District, a store representative said it had run out of VND500 notes, but VND10,000 and VND20,000 notes were still available.

Notes of VND50,000 will be available in about a week or so, it said. The store charges a 10-15 per cent fee for its services.

Meanwhile, on Facebook, similar services exchange foreign currency, with the most popular item of US$2 note.

This year, demand has increased greatly for $2 notes printed with an image of a chicken – the zodiac animal for Lunar New Year 2017.

A Facebooker, who began receiving orders for notes last Saturday, said the $2 notes with an image of a chicken sell for about VND450,000 ($20).

An Australian coin with an image of Queen Elizabeth II and one with an image of chicken are also in high demand. The price is VND200,000 for a gold coin and VND150,000 for a silver coin.

Although the services have become even more popular this year, they remain illegal.  

Nguyen Hoang Minh, deputy director of the HCM City branch for the State Bank of Viet Nam, said that banks could exchange notes freely if notes were ruined and could not be used.

However, he said that all money exchange activities with fees were not allowed.

Minh said that demand for new money peaked near the end of the year and up to Tet.

He said the central bank had told its branches in cities and provinces to educate people about saving small notes to use at Lunar New Year or when visiting pagodas and temples.

The bank has said it would supervise and punish cases that involve illegal exchanges of money at pagodas, festivals or online websites.

Dao Minh Tu, deputy governor of the State Bank of Viet Nam, was quoted as saying in Thanh Nien (Young People) newspaper that anyone engaging in illegal exchanges would be fined VND20-40 million under Decision 96 of the Government.

This is the fourth consecutive year that the bank has not printed new small notes to meet demand at Lunar New Year, according to Tu. 

VNS