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Paraguay's Digital Bank Ueno Enters Resolution; About 60% of Adults Affected
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The effective insolvency of Paraguayan digital bank Ueno has triggered a financial and political crisis. The central bank launched a resolution procedure after Ueno's capital ratio fell below 50 percent of the required minimum. Ueno reported 2.8 million customers in the first quarter, roughly 60 percent of Paraguay's adult population, and managed $800-850 million in public funds; frozen accounts also handled pension payments. Customers found accounts and ATMs inaccessible, gathered outside closed branches, and protested in Asunción. Central bank chief Carlos Carvallo resigned amid conflict-of-interest allegations over his prior role at the bank. President Santiago Peña, who had pressed Carvallo to resign, pledged via video to pass a law returning savers' money as quickly as possible. Opposition lawmakers are preparing impeachment proceedings against Peña over his past business ties to the Grupo Vázquez, which owned Ueno Bank.
Source report
In Asunción, thousands took to the streets, fearing for their savings. Source: Jorge Saenz/AP/dpa
Around 60 percent of Paraguay's adult population are customers of the digital bank Ueno. The institution's collapse has thrown many people into panic.
Financial and Political Crisis
In Paraguay, the de facto insolvency of a digital bank has triggered a financial and political crisis. While millions of citizens fear for their savings, parts of the opposition are preparing impeachment proceedings against President Santiago Peña. Peña, for his part, had pushed for the resignation of Central Bank chief Carlos Carvallo.
At the center of the scandal in the South American country is the digital bank Ueno. The Central Bank initiated resolution proceedings against the institution after its capital adequacy ratio fell below 50 percent of the required minimum.
Central Bank chief Carvallo himself had to step down due to allegations of a conflict of interest stemming from his previous senior role at the digital bank.
Millions of Customers Affected
According to its own figures, Ueno Bank had 2.8 million customers in the first quarter of this year — roughly 60 percent of the country's adult population. It is one of Paraguay's largest banks. Ueno also manages public funds amounting to between 800 and 850 million dollars. Pension payments were also processed through the bank's currently frozen accounts.
Unable to access their accounts through the bank's app or withdraw money from ATMs, frightened customers gathered in front of closed branches across the country. Video footage circulated on the news service X, among others. Customers demanded information about the whereabouts of their savings while police stood guard on site. Street protests have already occurred in the capital, Asunción.
President Peña attempted to reassure the population via video message. He said he would introduce a law "that returns to every saver what they are owed as quickly as possible."
In Congress, lawmakers are preparing impeachment proceedings against Peña. The proceedings concern his own former business ties to the "Grupo Vázquez," to which Ueno Bank belonged.
dpa/AP/krott
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Paraguay's Peña resigns after Ueno Bank collapse freezes millions of accounts