Paraguay seizes major digital bank tied to president, leaving millions of customers in limbo
The central bank said it will protect most savers as it investigates irregular loans and governance failures at the digital lender.
- On Monday, The Central Bank of Paraguay placed Ueno Bank into resolution after its solvency ratio fell below half the legal minimum, aiming to protect customers' savings and prevent broader financial disruption.
- Soon after his inauguration, President Santiago appointed Carlos Carvallo, Ueno's then chief, to lead The Central Bank, a move critics denounced as a conflict of interest amid concerns over loans to owner-linked companies.
- Ueno Bank manages $800 million to $850 million in public money for about 3 million customers, roughly 60% of the South American population, including about $380 million invested by IPS.
- Gladys Vera, the IPS finance manager, confirmed retirees will be paid as usual this month and the fund will take legal action to recover its investment; Each depositor is guaranteed up to about $38,000.
- Unlike bankruptcy proceedings, resolution allows The Central Bank to transfer deposits to stable banks while officials determine the bank's worth and investigate who was responsible for the financial deterioration.
46 Articles
46 Articles
(Mexico City = Yonhap News) Correspondent Song Gwang-ho = The Central Bank of Paraguay has initiated liquidation procedures for 'Hueno,' a major digital bank facing a financial crisis...
The Central Bank intervened Ueno Bank and froze the funds of about 3 million customers after tracing millionaire loans to companies of the group that owns the institution
They are the two top clients of the financial institution that led the current president of the Central Bank, who must now conduct the investigation, filed his resignation, but said he will still be in office anyway.
The president of the Central Bank of Paraguay, Carlos Carvallo, presented his resignation on Tuesday, at the time when the monetary authority started an intervention in the ueno digital bank, after detecting an insufficiency in its solvency index. The bentral bank and Carvallo — which presided over the fast-growing digital bank until August 2023 — were under pressure as to how they supervised the institution as well as its political connections.…
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