Paraguay’s Central Bank has begun a resolution process for Ueno Bank after identifying a serious capital shortfall. (Foto: Instagram)
The Central Bank of Paraguay has begun a resolution process for Ueno Bank after finding what it described as a serious capital shortfall. The move, involving one of the country’s major digital banking institutions, has raised concern among millions of customers. Central Bank President Carlos Carvallo submitted his resignation on Tuesday, Nov. 3, at the request of Paraguayan President Santiago Peña.
Carvallo said he would remain in his post while the bank’s resolution process is underway to ensure continuity of the work. His departure comes amid questions about the Central Bank’s oversight of Ueno and the institution’s political ties. Carvallo led Ueno before taking over as head of the Central Bank in 2023. Peña, meanwhile, was a partner in Ueno’s controlling group until March 2025.
Paraguay’s Public Prosecutor’s Office has requested a criminal investigation into the case and ordered the arrest of executives linked to the institution. The inquiry involves suspicions concerning the bank’s management and loans made to companies connected to its controlling group; those matters remain under investigation.
The resolution process is intended to protect depositors and preserve financial stability. The Central Bank said auditors had been appointed to assess Ueno’s financial position. As the process began, customers encountered closed branches and were temporarily unable to access or move their money through the bank’s app.
Ueno has about 3 million customers and manages approximately $850 million in public funds. Its account holders include retirees who receive benefits through the bank. The Central Bank said deposits are protected by a guarantee of up to 75 minimum monthly wages, equal to approximately $38,000 per customer. Preliminary estimates indicate that the guarantee could cover about 97% of depositors.
The government has also announced plans to use a bill to speed up payments to customers and ensure the return of public funds and pension money. The crisis presents a test for Paraguay’s reputation as an investment destination in South America. The Central Bank has described the case as isolated and said it does not signal widespread problems in the country’s financial system.
