Korea: New Issue

[Bimat]

50,000-won bank notes debut Tuesday

New 50,000-won banknotes, the largest denomination in Korea, go into circulation today amid both hopes and worries for the economy, as Korea makes an all-out effort to boost consumer spending while guarding against inflation.
Companies and financial firms have also been bracing for the circulation of the new bill, worth about $40.

Kookmin Bank, the nation's lender by asset, said it had been trying to supply its branches with enough numbers of the 50,000-won bill to meet the demand from those wishing to get hold of the new notes on the first day of circulation.

It will allocate 100 million won worth of the bills to each of its more than 1,000 branches, Kookmin officials said.

Using the new banknotes with automatic teller machines will be a little inconvenient for the time being, because banks have been slow in upgrading or replacing existing machines to accept the new bills.

By the end of last week, Kookmin Bank has just 250 machines ready and most of them are installed at branches in Seoul and major cities. As for the rest of branches, the bank will wait until it sees how the new bills are received, officials said.

Shinhan Bank plans to have 1,330 machines upgraded or newly installed. Woori Bank said at least one machine at each of its some 800 branches will accept the 50,000 won bills by the end of next month.

Retailers are hopeful that the launch of the higher-value note will encourage consumers to spend more.

Korean consumers have tightened their budget as the economy contracted sharply under the impact of a global recession. Weak domestic demand, coupled with shrinking exports, has been a key concern for economic policymakers as they struggle to put the economy back on the path for growth.

"We hope the issuance of the 50,000-won bills would positively affect sales, as it will encourage customers to make bigger purchases by cash," said an official at Shinsegae Department Store.

In time with the debut today, Lotte Department Store put together a variety of items priced at 50,000 won.

Clerks at E-mart, the nation's largest supermarket chain run by Shinsegae Corp. underwent training sessions over the weekend intended to get them familiarized with the new banknote and ways to detect forgery.

Bank of Korea officials hope that the 50,000-won notes will help reduce social and economic costs of having only small-value bills that are not in synch with the economy.

It is the first time that higher-value notes have been issued since the issuance of the 10,000 won bill in 1973. Korea's per-capital income has grown 150 times and consumer prices 12 times since then.

"The issuance of the higher-value note is expected to help reduce the costs of issuing, storing and settling the 100,000-won bank checks," which are widely used daily, Lee Nae-hwang, a BOK official said.

Concerns also persist that the larger denomination would push prices up. Product prices which are just below 50,000 won could be raised to 50,000 won, retail industry officials agree.

Still, there will be no likely major impact on prices, the central bank insists.

Prices were not majorly impacted by the issuance of the 10,000 won notes in 1970, or when high-value notes were introduced in European countries in 2002, Lee said.

(milaya@heraldm.com)

By Lee Sun-young



2009.06.23

Source : The Korea Herald

[Bimat]

Counterfeit W50,000 Bills Found

Only a week has passed since the new W50,000 bill went into circulation and already a man is in police custody for producing counterfeit bills. Incheon police say they are seeking an arrest warrant for the 28-year-old man whose identity has not been made public.

According to the preliminary investigation, the man forged 266 bills of the new banknote at home using a color laser printer. Police say the counterfeit bills are poorly made, but since the new banknotes have been in circulation for only a few days, not many people would have been able to distinguish them from the real ones. Authorities are trying to find out whether there were any accomplices.

Arirang News / Jun. 30, 2009 12:09 KST

Source : The Chosun

[Figleaf]

OK, let me get this straight. The guy is obviously not a pro. He scans both sides of a banknote. Fair enough. Prints both sides on a good laser printer. Fine. Cuts out the scans, a bit of precision work, but possible. Glues the two halves together. Huh? Who's fool enough not to feel the difference between two sheets of paper and regular banknote paper, without even looking at the note? Thinner paper? Wouldn't come through a run-of-the-mill laser printer. Double-sided printing? Not exact enough and you don't want any band of white on your self-made note And if you have doubts, don't these notes have watermarks?

This seems to me another case of an idiotic criminal, rather than high-falutin' police work.

Peter

[Bimat]

Where Are the Missing W50,000 Banknotes?

A large number of the new W50,000 banknotes that went into circulation in June of 2009 are unaccounted for. Some 56.36 million W50,000 bills have been issued since 2009, with a value of W28 trillion (US$1=W1,123), but as of the end of January, four out of 10 of the bills have gone missing.

When the bills were first printed, there were concerns that they could be used to amass slush funds or to stash away to dodge taxes. The missing bills suggest that these concerns were well-founded.

According to the Bank of Korea on Monday, the amount of W50,000 banknotes that have been printed totaled W28.2 trillion, up 32.5 percent or W7 trillion over the past year. That has increased since January last year when it surpassed W20 trillion. And W50,000 bills now account for 53.6 percent of the total number of bills in circulation, up 10 percentage points over the past year.

By contrast, the amount of W10,000 bills in circulation totaled W19.8 trillion as of the end of last month, down W2.5 trillion from last year. It amounted to W20.1 trillion until February last year but fell to W19.2 trillion the next month and ceded the top spot to W50,000 bills.

The explosive demand for W50,000 bills stems from their widespread use as cash gifts for special occasions like weddings and anniversaries, replacing the W100,000 bank checks which had been frequently used. Before the W50,000 bills were circulated, a total of W7 trillion worth of W100,000 bank checks were printed each month, but that plummeted after the W50,000 bills were printed to W3.4 trillion in December 2011.

But some attribute the surge in the number of W50,000 bills to increased demand from the black economy, involving bribes, gambling and illicit transfers of wealth. A key example is an W11 billion stash of cash discovered under a plot of farmland in North Jeolla Province last year that consisted mostly of W50,000 bills. The cash was the proceeds of an illegal online gambling operation.

Supporting such suspicions is the low collection rate of the W50,000 banknotes compared to other bills. The collection rate refers to the number of bills that are printed and later collected again by the BOK. In the case of W50,000 bills, it is less than 60 percent, meaning four out of every 10 of them are stashed away somewhere. For W10,000 and other bills, the collection rate is more than 90 percent.

Source