Brazil Orders Banco Master Liquidation After Owner’s Arrest, FGC Plans R$41 Billion Payout

Overview

• The Central Bank decreed extrajudicial liquidation of Banco Master, freezing all accounts and initiating the wind‑down under a Central Bank‑appointed liquidator.
• The deposit guarantee fund expects to reimburse about R$41 billion to roughly 1.6 million eligible creditors, capped at R$250,000 per CPF or CNPJ per institution.
• Federal Police arrested founder Daniel Vorcaro at Guarulhos under Operation Compliance Zero on allegations of fraudulent and reckless management and organized crime.
• Prosecutors and court records cite transfers of R$12.2 billion in early 2025 from BRB to Master tied to allegedly non‑existent credit portfolios, with total BRB exposure near R$16.7 billion and the BRB president removed from office.
• Authorities will probe sales of non‑FGC‑covered securities to state and municipal pension funds, including large Rioprevidência purchases of letras financeiras, leaving recovery prospects uncertain beyond the guarantee limit.