Paraguay central bank takes over Ueno Bank, freezing accounts and cards at the digital lender

Central bank moves to wind down Ueno

Paraguay's central bank has started resolution proceedings against Ueno Bank, one of the country's leading digital lenders, after finding that its capital had deteriorated sharply. The board voted unanimously on 2 November, and the intervention was announced early on Tuesday, 3 November. The regulator says the solvency ratio, which measures capital against risk-weighted assets, fell to less than half of the legal minimum. Resolution differs from a court bankruptcy: regulators can move a failing bank's deposits to sounder institutions before the remaining assets are wound down to repay creditors. The central bank insisted the problems are confined to Ueno and that the situation does not affect the financial system as a whole.

Frozen accounts and pension exposure

The intervention blocked accounts, payment cards, the mobile application and other services, and customers reported they could not use ATMs or online banking. Ueno says it has about 3 million customers, roughly 60% of the adult population, and manages between $800 million and $850 million in public money. About $380 million of that sits with the state pension and health fund IPS, which guarantees that pension payments to about 32,000 retirees will continue.

Liana Caballero, a board member of the central bank, described the closure at a press conference.

“We proceeded to close the entity, so neither the app, nor the cards, nor any service of the entity is active from this date.”

Authorities are now checking the bank's assets and liabilities before transferring deposits to other institutions. Services remain suspended until the authorities arrange coverage of deposits.

Leadership and loans at the central bank

Carlos Carvallo led Ueno until 2023 and, soon after Peña's inauguration, was appointed to head the central bank, a move critics denounced as a conflict of interest. After the intervention was announced, Carvallo submitted his resignation to the executive and sent a letter to the Senate, according to AFP. Peña had demanded his departure earlier. Carvallo told reporters on Tuesday that regulators first raised concerns about Ueno's loans to companies linked to its owners. A deeper inspection uncovered more serious irregularities that will be reported to the authorities, and he blamed recent news reports for further weakening the lender. The central bank said Carvallo has recused himself from decisions involving Ueno.

Political ties and arrests

Peña was a business partner of Grupo Vázquez, the conglomerate that owns Ueno, until March 2025. Ueno says he was never a shareholder or investor in the bank, and both Peña and the bank deny wrongdoing. A court ordered the arrest of eight senior executives, including Ueno president Miguel Vázquez, who presented himself to police. Opposition senator Rafael Filizzola estimated potential losses at $3 billion and told AFP that he and other politicians are drafting a text calling for Peña's removal from office. The Paraguayan Banking Association said the country's banks maintain their stability, solvency and liquidity. Officials appointed to the bank will take over its management, determine its worth and protect its assets.