Millions of Paraguayans lost access to their bank accounts Tuesday after the central bank moved to wind down Ueno Bank, a fast-growing digital lender whose solvency fell below half the required minimum. Branches closed, and cards stopped working.
The banking superintendency flagged loans to companies tied to Ueno’s controlling group, weakening liquidity and weak loan files in June. President Santiago Peña had done business with the group that owned Ueno until March 2025, though Ueno denies he was ever a shareholder or investor in the bank. By October, lawmakers in both the ruling party and the opposition were pressing him to oust the central bank’s board, and Fitch cut its outlook on Ueno’s securities to negative
On Monday, the board voted unanimously to start the procedure under Law 2,334/03. It attributed the gap to changes made to Ueno’s financial statements while the bank was regularizing its position, noting that the case was isolated and not a sign of wider trouble. The banking association’s vice president said the rest of the system operates normally and ruled out contagion.
The deposit guarantee fund covers up to 75 monthly minimum salaries, or 228.3 million guaraníes (about US$38,600), per saver at each bank, however many accounts that person holds. The central bank has until November 17 to pay and can extend that by 15 days. It aims to release an initial payout of up to 10 million guaraníes on Friday, after deducting any debts a customer owes Ueno.
Sponsored · Selkirk Copper Mines
The central bank estimates about 97% of savers hold balances within the guarantee. Carlos Carvallo, then the central bank’s president, said regulators want to shorten the wait and that “the priority will always be small savers,” in a translated quote.
Related: What Happened at Silicon Valley Bank?
Ueno had 2.9 million customers as of June. The rating agency FIX ranked Ueno Paraguay’s fifth-largest private bank at the end of 2025, with 8.9% of system deposits. The state pension institute IPS has put about US$355 million into Ueno deposit certificates and bonds, around 9% of its portfolio, and the state power company ANDE and the Itaipú hydroelectric project keep funds there.
Carvallo, who ran Ueno, then called Financiera Ueno, before taking the central bank job in 2023, resigned Tuesday in a letter to the Senate. The central bank says he recused himself from decisions on Ueno. Board member Liana Caballero, an economist, became interim president.
Peña canceled a trip to a Madrid summit, and opposition senators threatened to seek impeachment proceedings against him and Vice President Pedro Alliana.
Acting on a central bank complaint, prosecutors are probing breach of trust and other financial crimes. They ordered the arrest of eight directors, and at least three, including co-founder Miguel Vázquez, had surrendered to police by Tuesday evening. A judge also ordered a preliminary seizure of up to US$70 million in assets belonging to Ueno’s directors, companies in Grupo Vázquez and the group’s final beneficiary, at the central bank’s request.
The banking superintendency will send interventors to check Ueno’s books and protect its assets, and the central bank has promised sanctions where warranted.
