The Central Bank of Brazil issued a press note addressing reports on Banco Master’s transfers of credit portfolios to BRB, stating that its Supervision Department identified inconsistencies in the transactions and conducted investigations that showed the assets in those portfolios were not substantiated. It also reported that the case was escalated through criminal referrals and prudential actions, including a preventive prudential measure applied to BRB and a proposal submitted to the Central Bank’s Board of Directors for the extrajudicial liquidation of institutions in the Master Conglomerate. Supervision, led by Director Ailton de Aquino Santos, initiated the investigations and reported suspected criminal offences to the Federal Public Prosecutor’s Office with supporting documentation and technical analyses. The preventive measure on BRB was framed as aimed at preventing further transactions with potential liquidity impacts, while the liquidation proposal was linked to illicit acts perpetrated within the Master Conglomerate institutions; the Director also stated he never recommended acquiring fraudulent portfolios. The note reiterated the Central Bank’s role in monitoring liquidity conditions, including interbank asset acquisitions, and stressed that each financial institution remains solely responsible for assessing the quality of any credits it purchases and for maintaining adequate risk management controls. Director Ailton de Aquino Santos also said he had made his banking and tax information, as well as records of conversations with BRB’s former president Paulo Henrique Costa, available to the Federal Public Prosecutor’s Office and the Federal Police, waiving confidentiality for that purpose.
Central Bank of Brazil 2026-01-23
Central Bank of Brazil flags irregularities in Banco Master credit portfolio transfers to BRB and proposes extrajudicial liquidation of Master Conglomerate institutions
The Central Bank of Brazil's Supervision Department found inconsistencies in Banco Master's credit portfolio transfers to BRB, prompting criminal referrals and prudential actions, including a preventive measure on BRB and a proposal for the extrajudicial liquidation of Master Conglomerate institutions. Director Ailton de Aquino Santos highlighted the Central Bank's monitoring role and disclosed his banking and tax information to authorities, stressing that financial institutions must assess credit quality and maintain risk management controls.