“After a week I stopped suffering”: after the Ueno Bank crash, the Central Bank of Paraguay partially reimbursed customers

The Central Bank of Paraguay (BCP) announced on Wednesday that it had returned at least part of their assets to state-guaranteed Ueno Bank savers after its collapse plunged the country into an unprecedented crisis and toppled President Santiago Peña. The institution partially repaid funds to 1,812.

348 customers of Ueno, an online bank created barely three years ago and placed under administration at the beginning of November, while concerns persist, particularly over the retirement funds it managed. “After a week, I stopped suffering: this guarantee fund is working,” said enthusiastically Roberto Bonim, a 38-year-old real estate professional who on Tuesday recovered the approximately $6,000 he had deposited.

Gladys Emerlinda, a 60-year-old Uber driver, says she has already been given back the money she deposited with Ueno. However, she believes that this measure is only intended to ease tensions in the short term. “It's like giving a lollipop to a child, but you don't know what will happen next,” she emphasizes, referring to a possible deficit in pension funds.

The guarantee, however, excludes directors of Ueno Bank as well as deposits resulting from fraudulent or illegal operations. It also excludes mutual fund holders, whose investments are not considered bank deposits. “With the amount that we are going to process today, we will already reach 100% of the beneficiaries of this guarantee,” said Pedro Acosta, member of the board of directors of the Central Bank.

A third of the sums returned The total amount repaid so far is about $643 million, only part of the roughly $2.8 billion that Ueno Bank held when it was placed into administration on November 3 due to solvency problems. The percentage of beneficiaries concerned does not mean that all have recovered all of their savings. An emergency law approved by Congress last week authorized advance disbursements of up to $19.

000 dollars per depositor within a week - which ended this Wednesday. The Deposit Guarantee Fund (FGD) protects up to approximately $37,000 per saver per banking establishment.

Those who held higher amounts will still have to wait to recover the rest of their funds. To do this, they will have to wait for "the transfer of assets and liabilities (of Ueno) to other financial establishments", indicated Mr. Acosta, a process which will begin next week.

The manager hopes that this next step will be “rapid” in order to “have something new by the end of the month”. The authorities hope to use the obtained resources to supplement deposit insurance and prioritize the return of pension funds deposited with Ueno, which exceed $500 million. Among those affected are businesses, football clubs, volunteer firefighters and public bodies such as the Social Insurance Institute (IPS), which manages the pension and health insurance funds of more than 1.5 million people in Paraguay.

According to June data provided by Ueno Bank, 29% of its deposits belonged to the public sector. Paraguay's main employers' associations demanded on Wednesday from the new president, Pedro Alliana, measures to restore economic confidence and sanction those responsible for the crisis. The Central Bank placed Ueno Bank under its supervision on November 3 due to solvency problems, freezing the deposits of hundreds of thousands of Paraguayans.

Former President Santiago Peña, involved in the scandal, was dismissed three days later following a parliamentary procedure and placed in preventive detention.

Machine-translated from French