Paraguay’s Central Bank has begun a resolution process for Ueno Bank after finding a severe capital shortfall at the digital financial institution. (Foto: Instagram)
The Central Bank of Paraguay has begun a resolution process for Ueno Bank after finding a severe capital shortfall at one of the country’s major digital financial institutions. The crisis prompted Central Bank President Carlos Carvallo to resign on Nov. 3 at the request of President Santiago Peña, and raised concerns among the bank’s millions of customers.
Carvallo said he would remain in office during the resolution process to ensure the work continues. His departure comes amid questions about the regulator’s oversight of Ueno and political ties involving the institution. Carvallo led the bank before taking charge of the Central Bank in 2023. Peña was a partner in Ueno’s controlling group until March 2025.
Paraguay’s Public Ministry has requested a criminal investigation and ordered the arrest of executives connected to the institution. The inquiry involves suspicions concerning the bank’s management and loans to companies linked to its controlling group. The Central Bank’s resolution process is intended to protect depositors and maintain financial stability. The regulator said auditors had been assigned to assess the bank’s financial position. Customers reported finding branches closed and were temporarily unable to access their money through the app.
Ueno Bank has about 3 million customers and manages approximately $850 million in public funds. Its customers include retirees who receive benefits through the institution. The Central Bank says deposits are protected up to 75 minimum monthly wages, or approximately $38,000 per customer. Preliminary estimates indicate that the guarantee could cover about 97% of depositors.
The government said it plans to introduce a bill to speed up payments to account holders and ensure the return of public funds and pension funds. The crisis is testing Paraguay’s reputation as an investment destination in South America. The Central Bank has described the situation as isolated and said it does not indicate broader problems in the country’s financial system.
