Banking crisis: Central Bank of Paraguay begins returning funds to harmed savers

The Central Bank of Paraguay has started to repay their funds, in the form of advances, to savers who were victims of the banking crisis in Paraguay, at the origin of a political crisis which resulted in the impeachment trial of President Santiago Peña, we learned on Friday from a banking source. “The process of paying guarantee advances to Ueno bank depositors began on Thursday,” José Maciel, administrative director of the Deposit Guarantee Fund of the Central Bank of Paraguay (BCP), told AFP on Friday. The first disbursements, according to the official, concern depositors who had in the digital bank Ueno, at the origin of the crisis, “deposits of between 1 and 10 million guaranies” (160 USD to 1600 USD).

The Central Bank, he explained, has “distributed groups of depositors from Ueno Bank to other banks and financial entities where they already had active accounts,” and the corresponding amount is credited to these accounts. He did not specify how many affected savers had received advances as of Friday, nor the overall amount concerned, but indicated that “the following groups will be announced progressively” as disbursements progress.

During Santiago Peña's impeachment trial before the Senate on Friday, his lawyer estimated that 700,000 had, as of Friday afternoon, received first disbursements, without further details. As of Wednesday, the day after the outbreak of the crisis, Parliament adopted an express law providing for first payments, to injured savers, of advances which could reach up to the equivalent of “40 minimum monthly salaries”.

Supervision of a bank

The banking crisis which broke out on Tuesday with the trusteeship of Ueno Bank froze the deposits of nearly 3 million people, the number of customers claimed by Ueno, or almost half of Paraguay's population. Businesses and institutions were also affected. The Paraguayan Senate began the impeachment trial of Santiago Peña, president since 2023, on Friday. He presented his resignation on Thursday, but Parliament did not accept it, making his impeachment trial, led by the Senate, inevitable.

Since Tuesday, the crisis has generated several demonstrations hostile to President Peña, demanding not only his departure, but also his incarceration. Again on Friday, some 250 demonstrators gathered, sitting on a lawn adjoining Parliament while the impeachment trial of Santiago Peña took place, carrying signs demanding “Peña in prison”.