Paraguay seizes biggest digital bank, leaving millions unable to access savings

Paraguay’s central bank has seized Ueno Bank, one of the country’s largest digital lenders, after its capital ratio fell below half the legal minimum, leaving about three million customers unable to access savings, salaries and pensions. Authorities say 97 per cent of depositors are covered by a guarantee fund. President Santiago Peña asked central bank chief Carlos Carvallo to resign, while opposition lawmakers are preparing impeachment proceedings against him over his past ties to the bank’s owner.

Paraguay’s central bank has seized Ueno Bank, one of the country’s largest digital lenders, leaving millions of customers unable to access their savings, Washington Times reported.

The bank was placed into resolution on November 2 after its capital ratio fell below half the legal minimum, according to Real News Magazine. It had about 2.8 million customers, roughly 60 per cent of Paraguay’s adult population. Its frozen accounts were also used for pension payments, and protests have erupted in Asunción.

Authorities say about 97 per cent of depositors are fully covered by a guarantee fund that protects up to 228.3 million guaraníes (about $38,000) per person. For larger balances, the central bank promised only “the greatest possible protection,” BNN Bloomberg said.

Ueno also managed $800 million to $850 million in public money, including $380 million from the state pension and health fund, IBTimes reported.

President Santiago Peña asked central bank chief Carlos Carvallo to resign, and Carvallo has done so. Opposition lawmakers are preparing impeachment proceedings over Peña’s past business ties to Ueno’s owner, Grupo Vázquez. Peña has pledged legislation to return savers’ money quickly.