Asuncion. After the sudden collapse of Paraguay’s largest digital bank ‘Ueno Bank’, a severe financial and political crisis has arisen in the entire country.
The Central Bank of Paraguay (BCP) took over the bank as its solvency ratio was less than half the legal limit.
After this action, about 3 million customers have been affected and public anger has erupted on the streets of the capital Asuncion.
UNO Bank’s services, including its digital app, credit cards and money transfers, came to a complete halt soon after it was taken over by the Central Bank.
Due to this, about 60 percent of the adult population of Paraguay has been deprived of their own saved money. People are facing a huge crisis for their daily needs and transactions.
Political earthquake and major arrests
Given the seriousness of the matter, Central Bank head Carlos Carvalho has resigned from his post on the instructions of President Santiago Penya.
Carvalho had previously been president of the same financial company that later became Ueno Bank. He is facing serious allegations of conflict of interest and regulatory neglect.
On the other hand, the Special Unit for Anti-Economic Crimes and Corruption has taken prompt action and issued orders for the arrest of eight top officials including the bank’s founder and majority shareholder Miguel Vazquez and Ueno Bank Chairman Juan Manuel Guatale.
Government pension fund is also in danger
The impact of this crisis is not limited to ordinary citizens only. Public retirement funds worth about $380 million of the State Health and Pension Fund are stuck in this bank, causing great uncertainty among the general public as well as the pensioners.
Crowds took to the streets
Thousands of citizens, account holders and pensioners, angry over bank closures and account freezing, took to the streets of Asuncion. A huge crowd has gathered outside the closed bank branches.
The protesters raised slogans against the government and the responsible officials along with demanding their money back. Many video footage showed people committing arson and vandalism.