Major Digital Bank Collapses in Paraguay, Locking Around 3 Million Customers Out of Their Accounts

Paraguay's major digital lender Ueno Bank has entered resolution proceedings, leaving customers unable to access their accounts after regulators identified a severe capital shortfall. The bank serves around three million customers, raising concerns over savings, everyday payments and pension access.

The Banco Central del Paraguay (BCP) announced the resolution on 3 November 2026, following a board decision the previous day. Regulators said adjustments to Ueno's financial statements had pushed its solvency indicator below half the minimum required level.

Authorities have since outlined arrangements to return guaranteed deposits through other banks as the crisis triggers political fallout.

Customers Lose Access to Their Money

Customers reported being unable to withdraw cash, transfer money or use online banking after the intervention. Some gathered outside closed branches, seeking information about their savings.

Reuters interviewed Manuel Cáceres, a customer from Ñemby near Asunción, on 3 November. 'Unfortunately, a lot of people, myself included, are spending the morning like this,' he said.

The reported three-million figure reflects Ueno's overall customer base. It does not establish how many customers had money in their accounts when operations were suspended.

Regulators initially outlined a maximum 15-day period to assess the bank's assets and liabilities. That assessment is separate from arrangements for returning guaranteed deposits.

Regulators Announce Deposit Repayment Plan

The BCP confirmed that eligible deposits are protected up to 228.3 million guaraníes (£28,000) per depositor at each financial institution. The guarantee covers a customer's combined eligible accounts at the same bank.

On 3 November, the BCP announced an initial payment of up to 10 million guaraníes per eligible depositor. The following day, Paraguay's Senate unanimously approved legislation increasing the proposed advance to up to 121.76 million guaraníes (£14,000) per depositor. The bill was then sent to President Santiago Peña for approval.

Under the proposed legislation, payments are to begin within 24 hours of the law taking effect and must be completed within five working days. Customers with accounts at other banks would receive their advances there, while those without alternative accounts would have one opened in their name. Any overdue debts owed to Ueno would be deducted before payment.

The BCP said depositors would begin receiving notifications from 5 November identifying their assigned financial institution. The proposed advance is separate from the full deposit guarantee and does not mean every customer will immediately recover their entire balance.

Thousands of Pensioners Face Banking Changes

Paraguay's social security institute, IPS, is arranging alternative accounts for approximately 32,000 pensioners who previously received payments through Ueno.

The institute said seven banks would participate in the transition to maintain scheduled pension payments and the annual additional benefit on 17 November.

Meanwhile, the BCP has released payment aliases previously linked to Ueno accounts. Customers can now associate their telephone numbers, email addresses or identification numbers with accounts at other financial institutions.

This allows customers to receive new transfers elsewhere, although it does not release money already held at Ueno.

Bank Crisis Sparks Political Fallout

The intervention prompted central bank president Carlos Carvallo to resign at President Santiago Peña's request. Carvallo previously headed Ueno's predecessor, while Peña held a business interest in the bank's controlling shareholder, Grupo Vázquez, until March 2025.

Reuters reported that Ueno administered approximately $850 million (£630 million) in public funds. That figure does not represent a confirmed financial loss.

On 4 November, 35 opposition lawmakers submitted impeachment articles against Peña, alleging conflicts of interest and failures connected to the banking crisis.

Prosecutors also pursued proceedings involving people connected with Ueno and related businesses over suspected financial irregularities. Reports referring to 27 people should not be interpreted as meaning that all have been formally charged or found guilty.

Peña has called for depositors to be prioritised and said those responsible for irregularities should face justice.

The BCP has described Ueno's problems as an isolated case rather than evidence of wider banking instability. For customers, the immediate concern is when they will regain access to their savings and whether balances beyond the proposed advance can be fully recovered.