MercoPress. South Atlantic News Agency

Paraguay takes over Ueno Bank, with 3 million customers, and freezes its deposits

“We proceeded to close the entity; therefore, neither the app, nor the cards, nor any service of the entity is active,” said a member of the Central Bank’s board. Photo: EFE/ Juan Pablo Pino

Paraguay’s Central Bank on Tuesday took over Ueno Bank, one of the country’s largest banks, after its solvency ratio fell below 50% of the legal minimum, and froze all its assets and liabilities, including the savings of some 3 million customers and more than US$800 million in public funds. The bank immediately suspended all its services.

“We proceeded to close the entity; therefore, neither the app, nor the cards, nor any service of the entity is active from today,” said Liana Caballero, a member of the Central Bank’s board, which took the decision unanimously. According to its own figures, Ueno’s customers are equivalent to 60% of the country’s adult population, and it manages public funds including about US$380 million from the Social Security Institute, which runs pensions and public healthcare.

The Deposit Guarantee Fund covers savings of up to 75 minimum wages, about 228 million guaraníes or roughly US$38,200 per person. Those with larger balances will have to wait for the Superintendency of Banks’ final accounting. “The priority will always be small savers,” said Central Bank President Carlos Carvallo, who described the situation as “an isolated, one-off event” and said the financial system “remains sound and healthy”.

According to Carvallo, the takeover followed months of investigation that revealed loans to companies linked to the bank’s owners. On October 18, the Association of Banks of Paraguay had asked the Central Bank to report on the solvency of institutions that benefited from facilities in merger processes and warned about a bank’s credit exposure, which it did not identify, to companies in its own group. Days earlier, senators from the ruling party and the opposition had called on President Santiago Peña to dismiss the Central Bank’s leadership, which Peña backed.

Carvallo, who ran Ueno Bank before Peña appointed him to head the Central Bank in 2023, said he had signed his resignation, although he will remain in office until the bank’s resolution is complete. According to the Paraguayan press, several of the bank’s executives were detained, including its president, Miguel Vázquez.

The crisis had immediate political fallout. Vice President Pedro Alliana “paused” his bid for the ruling Colorado Party’s presidential nomination in order to “put the house in order”. The opposition Authentic Radical Liberal Party said it would push for impeachment proceedings against Peña and Alliana. “They plundered the pensioners’ money and this cannot be left like this,” said its presidential hopeful Ricardo Estigarribia, according to the newspaper ABC Color. In 2024, the Social Security Institute’s purchase of about US$32 million in Ueno bonds caused controversy; Peña, who called the reports a “media campaign”, was a shareholder in Ueno Holding, not the bank, and sold those shares in April 2025.