Paraguay’s central bank declared Ueno Bank insolvent and began a resolution process, triggering protests and resignations among central bank leaders. (Foto: Instagram)
Paraguay is facing an economic and political crisis after authorities intervened in Ueno Bank, a digital financial institution that stopped operating this week. The fallout has included the resignations of the head and two board members of the Central Bank of Paraguay (BCP), as well as an impeachment request against President Santiago Peña.
On Nov. 3, the BCP deemed Ueno Bank insolvent, meaning it could not meet its financial obligations. The central bank suspended the bank’s operations and began a resolution process. Paraguay’s Public Prosecutor’s Office also requested a criminal investigation and sought the arrest of two bank executives. The inquiry concerns suspicions about the bank’s management and loans to companies linked to its controlling group, which may have weakened the bank’s assets.
The crisis reached the central bank’s leadership. Carlos Carvallo, who had led the monetary authority since 2023, resigned. Carmen Marín and Marco Aurelio González, two other members of the BCP board, left their positions the following day. Before taking the central bank post, Carvallo had served as president of Ueno Bank.
Peña, an economist, was a shareholder in Ueno Holding until March 2025. The company is connected to the group that controls the bank. His past ties to the institution prompted opposition lawmakers to file a political-judgment request, a process similar to impeachment in Brazil that could result in his removal from office. Peña’s governing party also joined the request.
Ueno Bank had more than 3 million customers and served about 40% of Paraguay’s population, including Brazilians who used the institution. After the central bank took control, customers lost access to their funds, prompting protests in Paraguay. Customers demonstrated in downtown Asunción and outside Peña’s official residence, demanding the full return of their money. On Nov. 4, Peña said the central bank would reimburse customers affected by the bank’s dissolution.
The BCP said it would provide advance payments under the deposit-guarantee fund to affected customers, with payments expected to begin that week. The amount would be capped at 40 minimum wages. Payments are to be handled through other financial institutions; customers without another bank account will be given a temporary account at another institution. Bank employees also took to the streets to protest. The BCP said employees’ rights and payments would be protected, with the payments expected in the coming days.
