Paraguay Senate sanctions law to advance Ueno Bank deposit payouts

Paraguay's Senate gave unanimous final approval to a bill advancing deposit-guarantee payments to Ueno Bank depositors. The sanctioned text expands Law 2,334/03 on deposit guarantees and financial-entity resolution, adding Articles 1 Bis and 1 Ter. The Senate accepted amendments made by the Chamber of Deputies and sent the bill to the Executive Branch.

The measure would allow an advance of up to 40 monthly minimum salaries per depositor, using the minimum salary for unspecified activities in the Capital that is in force on the date of the relevant resolution. Before payment, the depositor's overdue obligations to Ueno Bank must be offset against all deposits held with the institution. The payment is therefore based on the resulting net balance, not simply the gross amount on deposit.

Five-day payment timetable

For resolution processes already under way, the payment procedure must begin within 24 hours of the law's entry into force and must finish within five business days. For future resolution processes, the five-business-day period runs from approval of the resolution.

The Deposit Guarantee Fund must make the advance by electronic transfer to an account opened for that purpose in the customer's name. If the customer has no account in that name, the text permits payment in cash. That creates immediate operational requirements for the Fund, banks and the Central Bank of Paraguay to reconcile depositor identities, calculate net balances and arrange accounts or cash payments within the statutory timetable.

The bill also requires anyone who receives a transfer in error, because they are not among Ueno Bank's affected depositors, to return the money within 24 hours. In practice, payment controls will need to identify mistaken recipients and support rapid recovery.

Senator Dionisio Amarilla said 1.4m people with balances would receive funds in accounts held at other banks, while 400,000 customers who held accounts only at Ueno Bank would have accounts enabled in coordination with the Central Bank. Those figures were statements by the senator, rather than thresholds or payment conditions in the bill.

The Senate's action sends the measure to the Executive Branch. The five-business-day deadline for the current resolution process is tied to the law's entry into force, as set out in the sanctioned text.