IPS Deposits in Ueno Bank Exceed Legal Limit; Pension Superintendency Investigates

Paraguay's Superintendency of Pensions is examining a controversy surrounding the Institute of Social Welfare (IPS) and its deposits in Ueno Bank. The head of the Superintendency, Griselda Figueredo, acknowledged that the IPS has "slightly exceeded" the legal threshold for funds held in a single financial institution.

The issue surfaced when Hugo Díaz, the IPS's Investment Director, admitted during a board meeting that the institution had deposited an amount in Ueno Bank exceeding the limits stipulated by the Law of Superintendency of Pensions. This law restricts deposits in one financial entity to no more than 10% of the total global portfolio or 20% of the issuer's callable liabilities. The IPS currently holds 2.15 trillion guaraníes in Ueno Bank, which represents nearly 11% of its overall portfolio.

Díaz attempted to downplay the situation, arguing that a portion of these funds are "sight deposits" intended for operational purposes, such as salary payments, rather than investments. However, he conceded that, by the Superintendency's criteria, the IPS is currently "exceeded." Figueredo stated that it is too early to declare an irregularity, emphasizing the need to differentiate between operational accounts and investment accounts.

She explained that sight accounts are used for day-to-day operational expenses, like paying salaries, while investment accounts might be used for loan collections or certificates of deposit. The Superintendency must now determine which of the IPS's multiple sight accounts at Ueno Bank are truly operational and should be excluded from investment calculations. This clarification is crucial for assessing the IPS's compliance with financial regulations.