Paraguay Shuts Down Major Bank, Freezing Savings of 3 Million Customers

ASUNCIÓN: Paraguay has taken control of Ueno Bank after a severe financial crisis pushed its solvency ratio below regulatory requirements, leaving approximately three million customers unable to access their bank accounts and savings.

The Central Bank of Paraguay initiated resolution proceedings on November 3 after determining that Ueno Bank’s solvency ratio had fallen below 50 per cent of the legally required minimum.

The decision resulted in the suspension of the bank’s services, including mobile banking applications, payment cards and other financial operations.

Ueno Bank serves approximately three million customers, equivalent to around 60 per cent of Paraguay’s adult population, making the intervention one of the country’s most significant recent banking developments.

Millions of Customers Face Restricted Access to Savings

The shutdown has created uncertainty for customers who suddenly lost access to their deposits and everyday banking services.

Ueno Bank reportedly manages between $800 million and $850 million in public funds, including approximately $380 million belonging to Paraguay’s state pension and healthcare fund.

The situation has raised concerns about the protection of public money and the recovery of customer deposits.

However, the country’s deposit guarantee system provides protection of up to approximately $38,000 per depositor, with estimates suggesting that around 97 per cent of depositors fall within the guaranteed limit.

Central Bank Launches Investigation

The Central Bank of Paraguay has placed the institution under an official resolution process to assess its financial position, protect assets and determine how depositors can recover their money.

The regulator confirmed that the intervention followed adjustments to the bank’s financial statements that exposed serious weaknesses in its solvency position.

Authorities have also initiated investigations into suspected financial irregularities involving the bank’s management and related companies.

The bank’s failure has triggered scrutiny of its regulatory supervision and business connections.

Banking Crisis Triggers Political Pressure

The collapse has also created political difficulties for President Santiago Peña because of his previous business connections with Grupo Vázquez, the conglomerate controlling Ueno Bank.

The president had business ties with the group until March 2025, while former Ueno executive Carlos Carvallo was serving as head of the Central Bank when the intervention took place.

Carvallo subsequently submitted his resignation following a request from Peña.

Opposition lawmakers have also initiated efforts to pursue impeachment proceedings against the president, intensifying political pressure surrounding the financial crisis.

Meanwhile, the Paraguayan authorities have stressed that the situation is specific to Ueno Bank and does not represent a general collapse of the country’s banking system.

The immediate priority remains restoring access to protected deposits, investigating the bank’s financial position and limiting the impact of the crisis on Paraguay’s wider economy.