Paraguay takes over Ueno Bank, with 3 million customers, and freezes its deposits

Paraguay's Central Bank took control of Ueno Bank, a major institution with 3 million customers and over US$800 million in public fund deposits, after its solvency ratio dropped below 50% of the legal minimum. The bank's assets and liabilities, including the savings of 3 million customers, were frozen, nullifying all services. Bank member Liana Caballero declared the entity closed, with no app, cards, or other services active.

Ueno Bank served as 60% of Paraguay's adult population's banking needs and managed public funds, including US$380 million from the Social Security Institute. The Deposit Guarantee Fund covers savings up to 75 minimum wages, approximately US$38,200 per person. Those with larger balances will await the Superintendency of Banks' final accounting.

Central Bank President Carlos Carvallo stated the situation was an isolated event, and the financial system remained sound. The takeover followed months of investigation revealing loans to companies linked to Ueno Bank's owners. The Association of Banks of Paraguay warned the Central Bank about a bank's credit exposure to its group companies.

Several executives, including Ueno Bank's president, Miguel Vázquez, were detained. Political fallout included Vice President Pedro Alliana pausing his bid for Presidential nomination and the opposition party calling for impeachment proceedings.