Paraguay intervenes Ueno Bank over insolvency concerns as depositors face access limits

Paraguay’s banking regulator has intervened Ueno Bank over insolvency problems, sending depositors into a familiar panic: people want their money, the branch doors are closed, and the resolution machinery is now in motion. For high-risk operators, the part to watch is not the political drama but the mechanics of the intervention, deposit protection, and what happens to customer funds when a regulated bank is put under resolution.

1. The Banco Central said the Superintendencia de Bancos will appoint intervenors once the resolution procedure starts, in order to verify Ueno Bank’s financial position. The regulator also said each customer is covered for up to 228 million guaraníes, or about $38,000, under banking law.
2. In Asunción, dozens of people gathered outside bank offices seeking answers after authorities called for calm. One customer, entrepreneur José Aguilar, said he could not access company funds needed to pay employees. He has around 20 million guaraníes, or just over $3,350 at the current Banco Central exchange rate, deposited at Ueno Bank.
3. Ueno Bank said it controlled funds for more than 2.94 million customers as of June. About 32,000 of them are pensioners from the state-run Instituto de Previsión Social (IPS), which has $355 million in the intervened bank.
4. The bank’s closure also hit pensioners and other depositors who went to branches on Tuesday and found them shut. A Cuban migrant identified only as Jesús was among those waiting to withdraw about 700,000 guaraníes the same day, before the report cuts off.
5. The intervention adds another layer to the political fallout around President Santiago Peña, who was criticised for having been a shareholder in Ueno Holding, linked to Ueno Bank’s owner group, and for keeping business ties until March 2025. He also appointed then-Ueno Bank chief Carlos Carvallo to head the Central Bank shortly after taking office in August 2023; Carvallo said on Tuesday that he has put his post at the president’s disposal and that his resignation is signed.