Paraguay Puts Ueno Bank Into Resolution as Central Bank Chief Offers to Resign
Ueno Bank customers face suspended services after a capital shortfall triggered regulatory action. Here is what Paraguay’s deposit guarantee covers and what remains uncertain.
Paraguay's central bank has placed digital lender Ueno Bank into a formal bank-resolution process after finding that its solvency ratio had fallen below half the legal minimum. The decision, approved unanimously on Monday, 2 November 2026 and announced on Tuesday, places a bank serving a reported three million customers under regulatory control.
The Central Bank of Paraguay (BCP) said adjustments to the lender's financial statements during a supervisory review revealed the capital shortfall. A solvency ratio measures a bank's financial capacity to absorb potential losses; falling below 50% of the required minimum does not mean that half of customers' deposits have disappeared.
Can Ueno Bank customers use their accounts?
The immediate disruption is substantial. At a 3 November press briefing, central bank officials said Ueno's app, cards and other banking services were not operating while regulators arranged the resolution. Paraguayan newspaper ABC Color reported that customers had been unable to complete transactions and that branches were closed.
The procedure is different from an ordinary court bankruptcy. Appointed officials will assess Ueno's assets and liabilities, preserve what remains and work towards transferring eligible deposits or parts of the bank's business to other institutions. The practical arrangements have yet to be fully communicated to customers.
Paraguay's Deposit Guarantee Fund covers up to 228,300,000 guaraníes per depositor at each bank, equivalent to 75 statutory minimum monthly wages. This is a combined limit for an eligible customer's deposits with Ueno, not a separate guarantee for each savings or current account. The US dollar equivalent varies with the exchange rate; the Associated Press put it at approximately $38,000 in its 3 November report.
Under the applicable legal framework, guaranteed funds are to be honoured within 15 calendar days of the resolution decision, subject to a single, formally authorised extension of another 15 days. That statutory timetable is not a promise that every customer can withdraw money immediately. The BCP said it would publish instructions through official channels; account holders should use those notices rather than unverified messages about repayment.
Balances above the guarantee ceiling have not been promised full repayment. The regulator says it will seek the greatest possible protection for larger deposits through the resolution process, but the outcome depends on the assets and liabilities ultimately established.
Why public funds and pensions matter
According to the Associated Press, Ueno says it serves roughly three million customers and holds an estimated $800 million to $850 million in public funds. That includes about $380 million associated with Paraguay's social security and health fund, the Instituto de Previsión Social (IPS), according to fund figures reported by the AP. These are reported holdings, not an official calculation of money lost.
IPS officials said November pension payments would continue because funds for the scheduled payments were kept at another bank. The organisation intends to pursue recovery of its Ueno investment, while the treatment of larger institutional deposits will depend on the resolution proceedings.
Central bank chief's resignation and regulatory questions
The crisis has also raised questions about supervision. Carlos Carvallo, president of the BCP and a former Ueno executive, said on Tuesday that he had signed and submitted his resignation but would remain temporarily to support the transition, according to Paraguayan reporting. His announcement should not be confused with confirmation that he had already left office.
President Santiago Peña previously had business ties to Grupo Vázquez, Ueno's parent conglomerate, the AP reported. Ueno says Peña was never a shareholder or investor in the bank itself. Both Peña and Ueno deny wrongdoing, and the central bank has said Carvallo did not participate in decisions concerning the lender.
Regulators have identified concerns involving loans to businesses linked to the bank's controlling group, alongside weaknesses in credit documentation and deteriorating liquidity. These matters are subject to further examination and any appropriate legal proceedings. An intervention is not itself a finding of criminal wrongdoing by the president, the bank's executives or the regulators.
The BCP describes Ueno's difficulties as a case specific to the lender rather than evidence of a wider Paraguayan banking-system failure. For depositors, the next significant development will be an official account of how and when their guaranteed balances can be accessed.
Sources and verification: Central Bank of Paraguay — 3 November statement · Associated Press — 3 November · ABC Color — bank services and deposit guidance · ABC Color — Carvallo's announcement · La Nación — supervisory findings
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Musa Ersoy
Musa Ersoy is an editor and writer at DEFUXA Global News, covering developments in the United Kingdom and around the world. He researches news stories using official statements, credible sources and independently verifiable information. His editorial work focuses on factual ac…
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