Paraguay Seizes Ueno Bank, Putting 3 Million Customers' Savings and $850 Million in Public Funds at Risk

Paraguay's central bank has seized control of Ueno Bank, leaving approximately three million customers facing restricted access to their accounts and putting up to $850 million (approximately £638 million) in public funds at risk.

The bank's resolution was approved on Monday, 2 November 2026, and announced the following day after regulators found its solvency ratio had fallen below half the legal minimum.

The intervention has intensified scrutiny of President Santiago Peña's former business connections and raised questions about the protection of customers' savings.

Why Did Paraguay Seize Ueno Bank?

Paraguay's central bank unanimously approved the resolution process to protect depositors and manage the lender's financial difficulties.

Regulators said adjustments to Ueno's financial statements revealed a severe capital shortfall, prompting intervention under Paraguay's banking laws.

Authorities had previously raised concerns about loans involving companies connected to the bank's owners.

The central bank stressed that Ueno's problems were isolated and did not indicate wider instability across Paraguay's financial system.

What Happens to the Three Million Customers?

Ueno reported approximately three million customers, representing a substantial proportion of Paraguay's adult population. After the intervention, customers faced difficulties accessing their accounts and conducting transactions.

Paraguay's deposit guarantee protects up to 228.3 million guaraníes per depositor per institution, equivalent to around $38,000 (approximately £28,500).

The central bank initially announced payments of up to 10 million guaraníes (about £1,250), with remaining eligible balances to follow under a separate timetable.

On 4 November, both chambers of Paraguay's Congress approved legislation intended to accelerate deposit-guarantee advances, which Peña signed into law later that day. The central bank announced advances of up to 121.76 million guaraníes (about £15,200), less overdue debts, payable within five working days.

The regulator has not guaranteed that every protected depositor will receive their full entitlement within 15 days. Customers with balances exceeding the statutory protection limit face additional uncertainty while authorities assess recoverable assets.

Why Is Public Money Caught in the Crisis?

Ueno held substantial government deposits, including investments belonging to Paraguay's Social Security Institute, known as IPS.

Reports have placed the institution's wider exposure at approximately $380 million (£285 million), while parliamentary figures identified around $355 million (£266 million) in pension reserves.

The differing figures may reflect separate categories of institutional funds rather than a confirmed discrepancy in losses.

Officials say regular pension payments should continue because funds for immediate disbursements are held elsewhere. However, recovering these investments remains a concern for Paraguay's pension and healthcare systems.

How Is President Santiago Peña Connected?

Peña previously maintained business ties with Grupo Vázquez, the conglomerate controlling Ueno, until March 2025. Ueno denies Peña was a shareholder or investor; both deny wrongdoing.

He appointed former Ueno executive Carlos Carvallo to lead Paraguay's central bank in 2023, prompting questions about potential conflicts of interest.

The regulator maintained that Carvallo had recused himself from decisions involving his former employer.

Peña requested Carvallo's resignation following the intervention, while Liana Caballero assumed interim leadership of the central bank.

Opposition lawmakers also submitted impeachment proposals against Peña, alleging failures of oversight and conflicts of interest.

Peña has called for accountability, while the allegations against him remain unproven.

Prosecutors ordered arrests involving individuals linked to Ueno as investigations continued. Detention or investigation does not establish guilt.

For depositors, the immediate concern remains recovering their money. For Paraguay, the intervention has become a test of financial oversight and public confidence.