# Ueno Bank's collapse freezes the savings of about 3 million Paraguayans and forces out the central bank chief

President Santiago Peña offered to resign and now faces a Senate impeachment trial, while depositors wait on a guarantee capped at about $38,000 each and the state has roughly $869 million trapped in the bank.

- Published: 2026-11-06T09:38:00.817Z
- Canonical: https://polylog.news/2026-11-06/ueno-bank-s-collapse-freezes-the-savings-of-about-3-million
- Publisher: Polylog (Global desk)
- Section: macro
- Sources: [The Guardian](https://www.theguardian.com/world/2026/nov/05/paraguay-president-santiago-pena-resigns), [Africanews](http://www.africanews.com/2026/11/06/paraguay-thousands-protest-banking-scandal-as-president-faces-impeachment/), [MercoPress](https://en.mercopress.com/2026/11/06/pena-says-he-will-face-his-impeachment-trial-as-argentina-denies-he-has-entered-the-country?utm_source=feed&utm_medium=rss&utm_content=main&utm_campaign=rss), [teleSUR](https://www.telesurtv.net/se-hunde-paraguay-banco-ligado-a-pena/)

On November 3 the Central Bank of Paraguay (BCP) [took control of Ueno Bank](https://en.mercopress.com/2026/11/04/paraguay-takes-over-ueno-bank-with-3-million-customers-and-freezes-its-deposits) after its solvency ratio fell below half the legal minimum. The takeover froze the savings of about 3 million customers and more than $800 million in public funds. The digital lender held [more than $2.8 billion in deposits](https://www.forbesargentina.com/today/crisis-bancaria-paraguay-intervienen-banco-mas-us-2800-millones-depositos-n101654), and its app and cards stopped working. [Africanews](http://www.africanews.com/2026/11/06/paraguay-thousands-protest-banking-scandal-as-president-faces-impeachment/) reports that nearly half the population has lost access to its savings, and thousands of people have protested in the streets.

The deposit guarantee fund covers [up to 75 minimum wages per depositor per institution, about 228.3 million guaraníes or roughly $38,000](https://www.forbesargentina.com/today/crisis-bancaria-paraguay-inician-proceso-resolucion-ueno-principal-banco-digital-pais-n101654). The central bank has promised only "the greatest possible protection" above that cap. The resolution procedure allows up to 15 days to start repayments. Paraguay's bankers' association, Asoban, [says the failure is isolated](https://infonegocios.com.py/que-esta-pasando/ueno-bank-asoban-descarta-riesgo-sistemico-y-pide-apurar-la-devolucion-de-depositos) and that Ueno held about 7% to 8% of system deposits.

The political crisis has moved faster than the repayments. [The Guardian](https://www.theguardian.com/world/2026/nov/05/paraguay-president-santiago-pena-resigns) reports that Peña's government had authorized Ueno to expand its operations sharply before it collapsed. Peña once held a stake in Ueno's parent company and sold it in 2025. [NBC News](https://www.nbcnews.com/world/south-america/paraguay-president-pen-resigns-mounting-pressure-bank-collapse-rcna607754) reports that eight senior Ueno executives, including founder Miguel Vázquez, have been detained, and that central bank president Carlos Carvallo has resigned. Peña tendered his resignation on Thursday. According to [MercoPress](https://en.mercopress.com/2026/11/06/pena-says-he-will-face-his-impeachment-trial-as-argentina-denies-he-has-entered-the-country?utm_source=feed&utm_medium=rss&utm_content=main&utm_campaign=rss), Congress lacked a quorum to consider the resignation, which leaves him formally in office. He says he will defend himself before the Senate. Argentina has denied reports that he entered its territory.

Outlets frame the cause differently. Venezuela-based [teleSUR](https://www.telesurtv.net/se-hunde-paraguay-banco-ligado-a-pena/) calls Ueno the bank tied to Peña and to "Milei's model for the region," and reports that government deposits made up about 29% of its funding at the end of June. That figure supports a different reading as well. A lender that drew close to a third of its funding from the state, expanded with regulatory approval, and was overseen by a central bank chief with prior ties to it was not built through open competition. It was a politically directed allocation of credit.

## What this means

The exposure falls on uninsured depositors, meaning businesses, municipalities and wealthier savers holding more than about $38,000. They now rank behind the guarantee fund in a resolution with no fixed timetable. A second channel is confidence in other digital and fast-growing lenders across the region. Asoban calls the case isolated, but its 7% to 8% deposit share is large enough that other banks will face withdrawals from cautious savers. The consensus treats this as one bank's fraud. The evidence points instead to a system in which state deposits and regulatory favor substituted for capital. That pattern recurs in Brazil, where the Banco Master fraud has pulled the state-owned Banco de Brasília into crisis. The precedent is Argentina's 2001 deposit freeze, which turned a banking problem into a lasting loss of trust in local deposits and pushed savings into dollars held outside banks. The likelier outcome is that insured depositors are repaid within weeks while larger balances face months of losses and litigation. Paraguayans would keep moving savings into cash, dollars and foreign accounts during that time. The read would be wrong if Congress passes a law covering deposits above the cap in full and the other banks report stable deposit balances this month.

## What to watch

- Whether the guarantee fund starts paying insured depositors within the 15-day window. A delay would extend the freeze to people the system promised to protect.
- The Senate impeachment vote on Peña and whether Congress accepts his resignation. The outcome decides who controls the bank resolution and the choice of the next central bank chief.
- Monthly deposit data at Paraguay's other banks. Falling balances would show the loss of trust is spreading beyond Ueno.