The Central Bank of Paraguay has ordered the start of a resolution process and intervention at Ueno Bank, after finding its solvency ratio fell below 50 percent of the legal minimum. The decision was approved unanimously by the board on Monday and announced on Tuesday, with the Superintendency of Banks appointing intervenors to take over management.
The central bank said the drop followed adjustments made to the bank’s financial statements during a regularisation process. The measure, it said, seeks an orderly resolution, protects depositors and preserves stability in the financial system.
Deposits and guarantees
The bank serves roughly 3 million clients, about 60 percent of Paraguay’s adult population. The central bank said 97 percent of clients have balances within the deposit guarantee limit, which currently covers 75 minimum monthly wages, or 228,300,000 guaranis, roughly $38,000.
Guaranteed deposits are to be paid within 15 business days, a period that can be extended by another 15. Public funds locked in by the measure are put at between $800 million and $850 million.
Pension fund claim
The state pension fund IPS is seeking to recover $380 million from the bank and to transfer the payments of 32,000 retirees. Ueno Bank, for its part, said it had received no notification from the central bank about a measure of this nature.
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The bank rejected what it called unverified information that could cause unjustified alarm among depositors. Carlos Carvallo, who previously ran Ueno, resigned as central bank president on Tuesday but remains provisionally to lead the transition.
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Source: Central Bank of Paraguay
