Paraguay partially refunds Ueno Bank depositors after collapse
Paraguay's Central Bank says it has partially returned savings to eligible Ueno Bank depositors after the lender collapsed last week. The move comes as the fallout from the takeover continues to spread through the country's political and financial system. The bank's seizure on November 3 triggered mass protests and helped drive the impeachment and arrest of former president Santiago Pena.
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Pedro Acosta of the Central Bank said 100 percent of Ueno clients entitled to a deposit guarantee fund had received at least part of their money back. The institution said it had partially refunded money to 1,812,348 people. Ueno executives and shareholders do not qualify for the guarantee fund, and most of the money held in the bank has not been recovered.
The scale of the crisis is significant because the number of people affected is larger than Ueno's direct client base. The bank held more than $800 million in public funds, according to the supplied material, and had become a major player in handling state pensions and accounts for several government entities. Its collapse has therefore raised questions not only about depositor protection but also about the management of public money.
Ueno began as a small fintech company with a digital-first model that attracted many low-income customers. Within three years, it had expanded into a larger financial institution with links to state payments and government accounts. The supplied material says Pena owned shares in Ueno's holding company until he sold them last year, and that he is accused of using his influence as president to steer millions in government deposits to the bank.
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The former president is currently in pretrial detention after being impeached on Friday, and he denies all charges. He is accused of hiding or downplaying the bank's financial problems despite warnings about questionable loans and solvency concerns. The case has become both a banking crisis and a test of public trust in Paraguay's institutions.
What remains unclear is how much of the remaining money can still be recovered and how quickly further refunds, if any, will be made. It is also not yet clear how the legal proceedings against Pena and others linked to Ueno will develop. For now, the central bank's partial reimbursement offers some relief to depositors, but the wider financial and political consequences are still unfolding.
