Paraguay takes over digital lender ueno bank; central bank chief quits and eight executives are detained
Paraguay's central bank (BCP) has started a resolution procedure for ueno bank, one of the country's biggest lenders and its leading digital bank, after its solvency ratio fell below 50% of the legal minimum. The bank's app, cards and services were shut down. BCP president Carlos Carvallo resigned the same day, prosecutors detained eight executives, and protests over frozen savings have spread in Asunción.
Paraguay's central bank, the Banco Central del Paraguay (BCP), said on Tuesday, 3 November, that its board had unanimously decided to start a resolution procedure for ueno bank, after finding that the lender's solvency ratio had fallen below 50% of the required minimum. The BCP said the shortfall followed adjustments made to the bank's financial statements during a regularisation process. The Superintendency of Banks will appoint administrators to assess the bank's assets.
The bank's services stopped immediately. "Neither the app, nor the cards, nor any service of the entity is active from this date," BCP board member Liana Caballero told a press conference, according to BBC News Mundo. Under Paraguayan law, deposits are guaranteed up to 75 monthly minimum wages per depositor and per bank, currently 228.3 million guaraníes (about $38,000). On Wednesday President Santiago Peña signed Law 7745, which allows an early payout of up to 40 minimum wages (121.76 million guaraníes) per depositor through the deposit guarantee fund, according to Diario HOY.
Ueno is one of Paraguay's largest banks. By its own figures it has about 3 million customers, around 60% of the country's adults, and it manages public money, including about $380 million invested by the state pension fund IPS, BBC News Mundo reported. The BCP described the case as isolated and said it does not reflect the state of the wider financial system.
Hours after the announcement, BCP president Carlos Carvallo resigned. EFE noted that he had led Financiera Ueno, the company the bank grew out of, before joining the central bank in 2023. Peña named former minister Raúl Vera Bogado as the new head of the BCP and called for calm.
Anti-corruption prosecutors ordered the detention of eight ueno executives, including chief executive and co-founder Miguel Vázquez and board chairman Juan Manuel Gustale, in a case for breach of trust and other offences; ABC Color reported that all eight were in custody by Tuesday night. On Wednesday the Public Ministry said 27 people had been charged over alleged irregularities, including loans and overdrafts to companies in the same business group, and asked for pre-trial detention for Vázquez and house arrest for the other seven, EFE reported.
The collapse has become a political crisis. Peña held shares in the group that controls ueno until 2025, AFP and ABC Color reported. Protesters calling for his impeachment gathered in central Asunción on Tuesday and Wednesday nights, and local media reported scuffles with police, who used pepper spray and rubber bullets on Wednesday. A group of 35 opposition deputies filed an impeachment motion against Peña and Vice President Pedro Alliana, according to ABC Color.