Paraguay's Central Bank Seizes Ueno Bank Amid Solvency Crisis

The Central Bank of Paraguay has seized control of Ueno Bank, a major digital lender, after its solvency ratio fell below half of the legal minimum. The bank's board voted unanimously on Monday, November 2, 2026, to put the institution into resolution to protect depositors and manage financial difficulties, according to reports from The Independent and IBTimes UK.

Impact on Customers and Public Funds

Ueno Bank serves approximately 3 million customers, which represents about 60% of the adult population in Paraguay. The intervention has left many customers unable to access their accounts or conduct transactions.

Public funds are also at risk, with Ueno managing between $800 million and $850 million in public money. This includes approximately $380 million invested by Paraguay’s state pension and health fund, known as IPS. While IPS finance manager Gladys Vera stated that retirees would be paid as usual because monthly payment funds are held at another bank, the fund intends to take legal action to recover its investment.

Regarding deposit guarantees:

• Each depositor is guaranteed up to 228 million Paraguayan guaraníes (approximately $38,000) from a central bank fund.
• On November 4, 2026, President Santiago Peña signed legislation into law to accelerate deposit-guarantee advances.
• The central bank announced advances of up to 121.76 million guaraníes (about $15,200), less overdue debts, payable within five working days.

Political Fallout and Investigations

The crisis has triggered a political confrontation involving President Santiago Peña. Opposition lawmakers have submitted 35 impeachment articles in the lower house, accusing Peña of conflicts of interest, misuse of pension funds, and institutional cover-ups. While the opposition lacks the two-thirds majority required to advance impeachment, they have reportedly secured support from some members of the ruling Colorado Party.

President Peña, a conservative economist, previously maintained business ties with Grupo Vázquez, the conglomerate that owns Ueno, until March 2025. Ueno states that Peña was never a shareholder or investor in the bank. Both Peña and the bank deny any wrongdoing.

In the wake of the intervention, the following actions have occurred:

• The central bank chief, Carlos Carvallo, resigned.
• Liana Caballero assumed interim leadership of the central bank.
• Eight Ueno executives were detained after prosecutors issued arrest warrants; the executives subsequently turned themselves in.
• Courts ordered the freezing of assets for those under investigation.

Financial System Stability

Regulators have stated that the issues are confined to Ueno and that the situation "does not affect the financial system as a whole," according to the central bank. The Association of Banks of Paraguay (Asoban) reported that lenders are working to absorb a surge of customers shifting accounts away from Ueno, but maintained that the banking system "continues to operate normally."

---

Sources

• independent.co.uk: Paraguay seizes major digital bank tied to president, leaving millions of customers in limbo | The Independent
• uk.news.yahoo.com: Paraguay bank crisis spurs lawmakers' calls to impeach president - Yahoo News UK
• ibtimes.co.uk: Paraguay Seizes Ueno Bank, Putting 3 Million Customers' Savings and $850 Million in Public Funds at Risk | IBTimes UK

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.