The 200 and 2000-rouble banknotes will become a prototype for the renewal of all the banknotes27 2016

- Arkady Vladimirovich, are you getting ready to issue the 200 and 2000-rouble banknotes announced by Elvira Nabiullina, Head of the Central Bank this year?

- We are preparing to that, we watch the events at the competitive selection (the Central Bank announced voting among the Russians, who can choose objects to be depicted on the banknotes Izvestia). At the same time, we are choosing security elements to be there in our opinion. We put our minds to technological solutions in a constant contact with the Bank of Russia. We hold consultations and meetings with them almost every week, so that we could start working upon the design as soon as the city is chosen. There is very little time for such work. It is an interesting challenge and an unusual decision for us. As a rule, one works upon both the design and the technology simultaneously, but in this case we are engaged in the technological preparation while we still dont understand the design completely.

Would you like to experiment with the materials this time?

- No. In this case it will be paper.

What security features are you planning to apply?

- The 200 and 2000-rouble banknotes will definitely contain new security features, because in our opinion (and I think the Bank of Russia agree with us), the banknotes should become a prototype of the whole banknote row renewal. We are definitely interested in making the set of security features better, more modern and contain new elements. Thats what we are working upon at the moment. I hope that we should obtain interesting results.

Have you determined the number of security features yet?

- The banknotes will definitely contain an equal or greater number than the existing ones, but the number is never discussed among the professionals. The question is which ones.

So, which ones?

- We will of course rely upon the traditions. The banknotes will contain quite complicated watermarks with the new opportunities that we have received from the application of filigree and multitoned watermarks. There will be interesting solutions in the field of security threads never applied before. There will be new elements produced with the help of various printing methods, their combination. There will be the already familiar security elements changing colour when the banknote is tilted or turned. We will naturally pay a lot of attention to the machine processing means, for both the ATMs and special sorting systems.

When the 5000-rouble banknote was issued, ATMs and terminals did not accept it for a long time because it was so unsecure. Will it be different this time?

- It is necessary to adjust ATMs to any new banknotes. Some ATMs may be adjusted remotely, simply by changing the software, but others require replacement of sensors and validators in the ATM accepting devices. So that they would not accept banknotes of the spoof bank. There is a requirement of the Bank of Russia, how many features and of what kind the ATMs should control. If it is observed, there will be no problem.

There is another matter there appears a temporal looseness. We do not disclose the security features necessary for the ATM adjustment, including the design, until the banknote is issued. As a result, the organizations producing and maintaining the ATMs receive the information about the new banknotes at the same time as the whole market. Naturally, there are difficulties of processing the new banknotes during the time while these organizations carry out the necessary adjustments and send them to the banks. It is a problem somehow. I think the Bank of Russia has a solution, but I may be out of touch here.

You said that the banknotes should become a prototype of the whole banknote row renewal. When is the renewal planned?

- It will be carried out gradually. Thats how it happens in our country once in seven years, as is customary in the world practice. The modified 5000-rouble banknote was put into circulation in 2010.

Will the renewal start with the 5000-rouble banknote?

- I cant say. We should first issue the 200 and 2000-rouble banknotes, and then the Bank of Russia will decide with which of the banknotes they will start the renewal. We will possibly prepare a banknote with a low face value and one with a high face value. There has not been any discussion or solution of the matter so far.

Are you printing the 10-rouble banknote now?

- No. weve been minting coins only for a few years already.

There was a time when you resumed printing the banknote.

- There was a very short time connected with organizing the logistics, provision of the regions. It was a single story. According to the information I have, the 10-rouble coin circulates quite actively it returns to the cash departments and is given to clients. Therefore, the Bank of Russia see no reasons to return to the banknotes, and neither do we.

Which coins do you hardly mint now? Beforehand, you mentioned 1, 5 and 10 kopecks. What about 50 kopecks?

- It is true. The orders for 10 and 50 kopecks are extremely rare now, but they happen sometimes. The main volume of coins produced now are those with the face values of 1, 2 and 5 roubles. And 10 roubles, naturally.

Starting with what face value, does the minting pay off?

- Speaking about roubles, they all do if its possible to use the word in this context.

Are any changes planned in the cash production?

- There are changes constantly. As for the new materials, the basic material, the substrate does not change on the whole. In this sense we remain adherents of cotton-based paper for banknotes. We watch various experiments and experience of the countries that introduced plastic banknotes closely. There are the Swiss banknotes made of a combination of paper and plastic.

So far, there is no case to consider the choice of paper necessarily worse than the choice of plastic, not to mention more complicated substrates.

For example, we now have tropical rains in Moscow constantly in summer. Is it not a reason to choose waterproof money?

- Quite a short time ago, we spoke to the experts about the fact that even after rough washing there remain the main security elements enabling their identification. Therefore you can easily wash your cash.

You have produced Plamet (a development representing a new payment means combining the peculiarities of both banknotes and coins Izvestia) for the Bank of Trans-Dniester. Have you produced other coin-like products for anybody else?

- We are negotiating with a few banks now. There hasnt been mass production, but there are reasons for that. We produced a trial sample for the Bank of Trans-Dniester using the equipment not designed for mass production. It was a technology elaboration. It was successful, and the coin-like products showed their great worth in circulation.

Now another stage is coming we are preparing mass production, an opportunity to produce such products in sufficient volumes for reasonably large customers. As soon as the production is launched, and it will happen this year, I think we will gain some of the more or less referential customers and develop Plamet further with their help.

We hope on that in some shape, perhaps in a commemorative product so far, Plamet may be applied in the production of the Russian coins or banknotes. However, I should stress again that at the moment the Bank of Russia has no agreements or clean schemes about that at the moment. It is only our hope and some preliminary talks.

Are the customers the countries of the CIS?

- Weve a great circle of customers. The demands of the Russian market have decreased: the economic situation is not easy, the amount of money in circulation remains practically stable, it has grown by a negligible margin only. It has remained at the level of seven or eight trillions in circulation during the past three years. Because the index is stable, our production volume is determined by natural wear and tear only. Therefore, Goznak has reasonably great opportunities of working in the outer market. We use them, and the number of customers and volumes grow. Naturally, we are interested in offering various products to our customers. Not only banknotes, but coins also, and coin-like products like Plamet. Therefore we expect to find those whose circulation conditions Plamet will match among our traditional customers.

Who are your traditional customers?

- South-East Asia, a number of countries from that region are our large customers. Indonesia, Laos, Cambodia are also large customers of all kinds of products. There are quite many customers in the Arab countries Lebanon, Syria, Yemen at various times, and Egypt (to a lesser degree, of some products).

Is Goznak printing banknotes for Syria?

- Yes. We produced a few lots, and they address us with orders periodically. It doesnt happen often, but it is true. Weve never hidden the fact that we produce banknotes for Syria. There are a number of African countries among our customers too Rwanda, Angola. A number of countries of the Latin America. Weve got a very interesting order that we have just started working upon minting coins for Columbia.

The number of customers grows, they change. It is quite a serious factor of our activity export, moreover, it is not only banknotes and banknote paper. We have also realized a number of projects of passport solutions.

What is the share of export activity in the revenue?

- I think we will exceed 6 billion roubles in export this year. It is unswervingly over 15% of the revenue.

Have you participated in the Belarusian denomination in any way?

- No. the banknotes were printed in England in 2008 2009, right before the crisis, and waited for their time. There came a crisis, and there was no sense to introduce the new banknotes then. The banknotes will be put into circulation on July 1.

I believe the matter of additional banknote printing will raise sooner or later. The process of natural cash turnover will start. There will be a lack of some face values, and it will become necessary to print additional numbers of some of the banknotes, and some will drop out of the circulation in a year or a year and a half. The situation will change. We hope to return to a market which has been traditional for us and would like to offer interesting conditions to the customers.

Have there been any negotiations yet?

- There cant be a subject for that yet. As a rule, all central banks understand quite well how much cash should be printed for a denomination. Therefore, we can assume that there is enough money for a few months, or, perhaps a year, in order to fill the cash circulation channels. Time will show.

Can the fact that you did not produce the banknotes be in the way?

- We should see. So far, we have only caught a glimpse of the new banknotes of Belarus. They were printed in 2008, after all. There are likely no serious patent or other limitations to hinder their reprinting. However, I would like to repeat that we have not prepared a detailed position yet. The customers opinion is determinant for us.

Will you be able to offer competitive conditions?

- I think we will be able to offer the best conditions.

Goznak has become a joint stock company recently. Can we now speak about the first months of operation of a joint stock company, how is the strategy changing?

- It is too early to speak about it so far. I can say that the period of reorganization of the federal state unitary enterprise into a joint stock company was important and uneasy for us, and the process continues. We are engaged in adjusting the whole system of corporate management, and it has changed a lot. Instruments of working with the board of directors are being formed, credentials are being determined, the work of committees of the board of directors is being organized. Another not less important task is the necessity to increase the economic effectiveness of our work. The work is almost completed, but it continues at the moment. We will send a renovated strategy of Goznaks development till 2030 to the board of directors in the nearest future.

There will be no radical changes, but we will pay much more attention to solutions at the junction of our traditional business connected with security printing and information technologies. Because today practically no product is manufactured without any support of informational processes.

The stamps for alcoholic beverages are built into the Unified Governmental Automated Information System. We now support a certain part of the information system of Federal Service for Alcohol Market Regulation within the framework of launching the Unified Governmental Automated Information System in the retail trade. I will not even speak about the passports the system of their production is initially built at the junction of security printing and information technologies.

During the production, all banknotes pass single-note control. In fact, today there is a technical opportunity to count all banknotes according to their face values and keep a database of them. We can take practically any product, and it has an informational side. We need to support and develop this informational side. In this sense, data processing centers that are being developed today, communication channels and a whole number of services we provide to our customers within the framework of the existing systems, are important. We see a development potential of identification systems, informational security systems that is what our customers would like to receive from the services we offer them.

What do you mean by identification?

- It has happened so that today we hold a large volume of personal data of the citizens of the Russian Federation. Those are not only passports. The Social Insurance Fund, the Pension Fund, the Fund of Obligatory Medical Insurance are among our clients at the data processing centers. We do not use the data, but we possess them from the point of view of the physical platform and infrastructure operating.

What about biometrical identification?

- Including that, too.

What can one do with it?

- Nothing in the context you mean. Even the fingerprints a person dusts for to receive a biometric passport, are stored only in the passport microchip, but not in the database.

Could you become operators of a biometric database?

- We could. From our point of view, it will be on demand among the market players. It is all great informational systems, electronic payments. However, the security problem level they cause exceeds the security problem level of banknotes within the framework of cash circulation many times in its class and complexity.

It means that if there is a mighty impact, there will be quite strong counteracting on the part of the same information systems, encrypting systems, identification systems and so on. In this context, we observe obvious growth prospects for us.

To return to the recent transformation into a joint-stock company, is the capital disclosure implied is the future, or never and in no circumstances?

- It is not discussed. Within the framework of the current privatization processes it is definitely not discussed, but in the hypothetic light who knows.

Goznak recently acquired another hypostasis you opened the museum of money in the Peter and Paul Fortress in Saint Petersburg. Why do you want this non-core business, as the saying goes?

- Goznak will be 200 years old in a year and a half, and the Saint Petersburg Mint is almost 300 years old. Goznak has traditionally preserved samples of the manufactured products, and in some cases, especially at the mints, tools for minting those coins and medals during this time. The storage volume has already exceeded millions. There are truly unique items among these objects, and the researchers and simply interested people should probably see them. At least, know that they could see them.

It is difficult to make an exhibition within the territory of Goznak or the mints in terms of the visiting regime. We have tried to show the most interesting items of Goznaks collection at the museum, on the one hand, and to present it all according to some logics, in a retrospect of development of the cash turnover in Russia. Thus, we solve two tasks we open access to rarities and solve an educational task by disclosing information about the history of cash circulation and providing an opportunity for everybody to come to know it.

Source:  IZVESTIA, 27.07.2016, Anna Kaledina
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