Paraguay seizes digital bank Ueno

What happened

Paraguay’s central bank (BCP) has taken control of Ueno Bank, one of the country’s most popular lenders, after finding a severe capital shortfall. Its board voted unanimously on 2 November to start a resolution procedure and announced the decision on 3 November, according to EFE, published by ABC Color, and the AP. The bank’s solvency ratio had fallen below half of the legal minimum. The case drew wide attention beyond Paraguay: “banco paraguaio” was one of the most searched terms on Google in Brazil on 4 November.

Customers locked out

The AP reports that Ueno, a digital lender run largely through its mobile app, has about 3 million customers, roughly 60% of Paraguay’s adults. On the day of the takeover customers could not log in, withdraw or transfer money, and The Asunción Times reported that the app, debit cards and credit cards were unavailable that morning. Prosecutors ordered the arrest of eight people, including the bank’s president and its chief executive, the AP said.

What depositors can get back

Paraguay’s deposit guarantee fund covers up to 75 monthly minimum wages, currently 228.3 million guaraníes per depositor and per institution, about US$38,000 according to the AP. The limit applies per person, not per account. A preliminary central bank estimate reported by the AP says this fully covers about 97% of depositors. By law, payouts are due within 15 calendar days of the takeover, and that period can be extended once. As a first step, depositors are due to receive up to 10 million guaraníes, about US$1,700, minus any debts they owe the bank. For larger balances there is no promise of full repayment; the central bank says it will seek the greatest possible protection.

A political storm

Ueno also handled large sums of public money: between US$800 million and US$850 million, including about US$380 million from the state pension and health fund (IPS), according to the AP and La Tribuna. In June, the regulator had warned the bank about lending too much to companies linked to its owners. Central bank governor Carlos Carvallo, who led Ueno before joining the central bank in 2023, signed his resignation at President Santiago Peña’s request but is staying on to oversee the process. Peña was a business partner of the group that owns Ueno until 2025, and opposition senators say they will seek his impeachment. Paraguay’s banking association said it saw no sign of a wider outflow of deposits from other banks.

Why it matters for payments

The case shows how quickly everyday money can stop moving when a provider fails: card payments, bank and wire transfers and pension payments all ran through one app. About 32,000 retirees who were paid through Ueno are being moved to another bank so their pensions arrive as usual, the AP reports. It also shows why guarantee limits matter and why they apply per person and per institution. For families who send a remittance to Paraguay or receive money from abroad, the practical lesson is to know where an account is held and how the money in it is protected.

What to watch next

The key date is the end of the 15-day payout window, which The Asunción Times puts at around 17 November, and the central bank’s announcement of how customers can claim their money. Watch also the law Peña agreed with congressional leaders to speed up payouts, the pension fund’s planned legal action to recover its investment, the impeachment push in the Senate and what the Superintendency of Banks finds as it reviews the bank’s books.

What it means for Odix Pay users

If you send money to Paraguay or to other countries, the Odix Pay money transfer app lets you send to bank accounts abroad through Odix money transfer, with the fee and exchange rate shown before you confirm. To receive euro payments in your own name, a personal EUR IBAN is available in many countries. At Odix Pay, customers’ fiat balances are held in segregated accounts with our partner. Nothing here is financial advice. Availability depends on your country, and fees are shown in the app.