The Board of Directors of Paraguay’s central bank (BCP) has approved regulation to regulate payday accounts, so that financial institutions offer quality products at an affordable cost. It also aims to promote transparency and increase the number of people in Paraguay with bank accounts and operating within the financial system.

The regulation sets the minimum conditions and criteria to be met by financial intermediation institutions and electronic money entities regulated by the BCP that provide payday and loan services using these accounts.

Financial institutions

The accounts may be used for deposits, loan disbursement, payments, electronic transfers and any other transaction that has been previously and expressly authorised by the account beneficiary.

• Deposits may be paid in with no limit to the number of transactions and at no cost, through agents or branches (with no limits on the sum involved), ATMs (provided that the institution has an operational deposits-feature), non-banking correspondents (within the daily limits set by the disbursing institution), etc. Furthermore, the deposits paid into these accounts will be underwritten by the Deposit Guarantee Fund.
• Institutions offering withdrawal and payment services through ATMs and/or non-banking correspondents should provide at least 10 withdrawals or queries a month at no cost. Charges (restrictions or fees on overdrafts) for using other entities’ ATMs will be decided at the paying entity’s discretion.

All account authorisations, acceptances, instructions and transactions may be carried out on-line and/or digitally, including those using the beneficiary’s electronic or digital signature.

Institutions should also provide the account holder with a debit card or other device, at no cost, for withdrawals from ATMs and purchases using dataphones. They may only opt not to issue such cards if other more modern mechanisms can be used for the same ends, in which case the card will be issued at the account holder’s request and for a cost.

Electronic-money institutions

Accounts may be used to carry out transactions that have been adapted to e-money accounts, in accordance with current law, but under no circumstances may these entities originate credits or loans to the account holders. They will not bear interest.

If the beneficiary’s wages cross the upper threshold set for these electronic-money accounts, the funds should be transferred to a sight account in the financial institution selected by that beneficiary.

• Deposits and/or credits in lieu of wages in the account may be paid in without limits on their value and at no cost, through the institution’s points of sale, ATMs and self-service terminals.
• The institution must make available points of sale for withdrawals and payments; beneficiaries may make 10 such transactions a month at no cost.

General provisions

There will be no minimum balance requirement when opening a payday account, or any ongoing average balance minimum, and the account may be totally or partly exempt from fees, costs and expenses, depending on each case.   

In order to open an account, payees must supply information in electronic-file format, using a Single Contract Mode, about the contract signed between the payee and the disbursing entity, including information about the account beneficiaries’ identity document number, private and work address, telephone, town, gender, civil status, nationality, etc.

Those disbursing entities that choose to offer these products should inform the Banking Authority that they are going to provide the service, enclosing a copy of the Single Contract Model within 60 working days, which the beneficiary will sign for approval.

The institutions must, at the very least, provide their customers a mechanism for balance queries, free of charge.

This regulation will come into force on 1st July 2017.