Paraguay Transfers 3.99 Trillion Guaraníes to 1,812,348 Banco Ahorro Depositors

Key Facts

Paraguay’s central bank said on November 11 that it had completed the transfer of 3.99 trillion guaraníes to financial institutions to cover the advance deposit-guarantee payment for eligible Banco Ahorro depositors. The bank said 1,812,348 depositors had received coverage and that the transfers met the deadline set by Law No. 7745. The final payment, amounting to 1.79 trillion guaraníes, funded the last groups of depositors, numbering about 29,988 people. The bank said the total transfers included amounts earmarked for beneficiaries through financial institutions. The announcement closes the advance-payment phase for eligible guarantee claimants, while separate verification remains necessary for some holders of savings certificates.

Payments accelerated in the days before the announcement. By the close of November 9, the central bank had paid 2.126 trillion guaraníes to 1,738,804 depositors, covering 93.1% of all depositors, according to an earlier bank statement. The remaining payments at the time included accounts under restriction, holders of savings deposit certificates, and customers with transactions involving the Development Finance Agency. After the November 11 transfers, the bank said advance-payment coverage had reached all depositors eligible to receive it. Funds in demand deposit and scheduled savings accounts were available for use or withdrawal, while the bank subjected funds linked to certificates to verification of the current holder’s identity.

For savings deposit certificates, the central bank asked holders to submit the required information through a platform it plans to make available for verification. It said the funds would be released as soon as possible after the review is complete. This means that completion of the overall transfers does not automatically allow certificate balances to be withdrawn before the claimant’s status is established. The bank said balances in demand deposit and scheduled savings accounts could be used or withdrawn after they were deposited. These procedures establish a separate process for certificate holders as part of the bank’s resolution.

The payments followed the central bank’s start of Banco Ahorro’s resolution, under a decision unanimously adopted by its board on November 2. The bank said the decision came after the solvency ratio fell below 50% of the required minimum, following adjustments to financial data during the regulatory resolution process. The central bank had explained that deposit insurance is subject to a legal cap for each person or entity at each financial institution. This mechanism explains why payments focused on depositors eligible for the advance payment under the guarantee rules. The transfer statement alone does not establish estimates of the fund’s depletion rate or the payments’ effect on its future capacity.

Central bank data for September show the scale of Banco Ahorro’s deposits before the resolution. Total recorded deposits stood at 16.9518 trillion guaraníes, while the number of depositors was 2,807,978. The fund’s data included a figure for covered deposits after compensation, without changing the fact that the November 11 announcement concerned advance-payment transfers to eligible recipients. Banco Ahorro was the country’s sixth-largest lender and held about $850 million in public funds as of June, including money for the government pension fund, according to Reuters. The Associated Press said the bank’s closure also affected pension funds and government-owned accounts, and that more than 3 million people lost access to their accounts when the government intervened.

The fallout from Banco Ahorro’s collapse extended to Paraguay’s sovereign risk assessment. On November 11, Fitch placed Paraguay’s BB+ rating on negative watch for a possible downgrade, citing the implications of the bank’s collapse and subsequent political turmoil, Reuters reported. The agency pointed to risks of spillovers to the banking system, government finances, growth and policy continuity. But it said it did not currently expect broader financial-stability risks, given the sound solvency and liquidity positions of other systemically important banks. At the same time, it warned of downside risks to its forecast for economic growth of 4.5% in 2026. These sovereign concerns are unfolding alongside the continued processing of depositors’ claims, while certificate holders await completion of verification through the platform the central bank said it intends to make available.