Paraguay Central Bank Pays $644M to Uneo Depositors
The digital lender's collapse leaves deposit insurance under strain as payouts begin for 1.8 million clients. The post Paraguay Central Bank Pays $644M to Uneo Depositors appeared first on Global Finance Magazine .
The Central Bank of Paraguay has disbursed approximately $644 million to over 1.8 million depositors following the shutdown of Ueno Bank, according to figures released Thursday. Preliminary estimates suggest the payouts could deplete up to $928 million, or 58% of the country's Deposit Guarantee Fund, leaving around $672 million to cover future bank failures.
Rhys Hicks, an Associate Banking and Payments Analyst at GlobalData, explained that Ueno Bank's depositors, not loans, funded the bank's operations, meaning the other banks in Paraguay will share the cost and may be strained. Hicks also noted a potential issue of fraud due to the rapid onboarding of customers. This incident, the largest digital bank failure in Latin America this year, resulted from Ueno Bank's own lending, contrasting with Brazil's Will Financeira, which collapsed due to issues at its parent bank.
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