Central Bank Intervenes & Liquidates Banco Master: Fundamentals & Effects of the Extraordinary Measure

On November 18, 2025, the Central Bank of Brazil (BC) decreed the extrajudicial liquidation of Banco Master S.A., Master S.A. Corretora de Câmbio, Banco Letsbank S.A., and Banco Master de Investimento S.A. The act, signed by the president of the Central Bank, Gabriel Galípolo, appointed EFB Regimes Especiais de Empresas as the liquidator, granting it full powers to manage and sell the conglomerate’s assets.

The decision also froze the assets of the controlling company, Master Holding Financeira, of 133 Investimentos e Participações, and of the main executives Daniel Bueno Vorcaro, Armando Miguel Gallo Neto, and Felipe Wallace Simonsen.

The BC’s intervention came just forty-five days after the regulatory veto of the sale of 49% of Master to Banco de Brasília (BRB), a deal under negotiation since March. With the decree, the regulator also terminated last-minute talks between the bank and Grupo Fictor, announced on the eve of the measure.

Extrajudicial liquidation is applied when the BC concludes that there is no viable recovery plan or that the institution faces irreversible insolvency, whether due to serious violations of financial regulations or other causes such as an inability to meet obligations. Under this regime, all bank operations are suspended, contracts are automatically terminated, and the institution is orderly removed from the National Financial System. There is no fixed term for completion — it depends on a new BC decision or a bankruptcy declaration.

Once proceedings are initiated, the Fundo Garantidor de Créditos (FGC) becomes responsible for reimbursing creditors within the legal limit of R$ 250,000 per individual or corporate taxpayer ID (CPF or CNPJ), capped at R$ 1 million every four years. The mechanism covers deposits and investments such as checking accounts, savings, CDBs, RDBs, LCIs, LCAs, and bills of exchange or mortgage notes. These values include any taxes withheld at source, such as income tax (IR) or financial operations tax (IOF). Credits above the ceiling are included in the liquidation estate and paid only after asset realization.

The FGC will begin payments after receiving the complete client database from Banco Master. On average, this data transfer takes up to 30 business days from the decree date. Once received, the FGC usually enables access within about 48 hours through its app, allowing creditors to indicate a bank account, verify identity via facial biometrics, upload documents, and sign a subrogation agreement. The payment follows soon after, though the FGC does not set a final deadline.

It is still unclear whether coverage will extend to CDBs issued by Banco Master de Investimento, an issue on which the FGC has promised further clarification.

During the intervention, the liquidity of some instruments — especially CDBs — may be temporarily restricted while the liquidator assesses the bank’s actual assets. Until the situation is normalized, investors should monitor official communications from the BC, FGC, and EFB Regimes Especiais, ensuring their banking information is up to date to expedite reimbursement.

The case illustrates how governance and capital issues in mid-sized financial institutions can rapidly escalate into liquidity crises, requiring swift regulatory action. At the same time, it highlights the FGC’s role as a primary safety net for savers and retail investors — within defined limits — preserving confidence in the financial system even during isolated stress events.

HOW TO REQUEST REIMBURSEMENT:

➡️ INDIVIDUAL (CPF)

1. Download the “FGC” app (available for iOS and Android);

2. Create your personal account (login and password);

3. Enter your bank account details for receiving the reimbursement (must be in your name);

4. Validate facial biometrics and upload your ID document (RG or driver’s license);

5. Digitally sign the subrogation agreement;

6. Payment is made within up to 48 business hours after completion of the process.

➡️ LEGAL ENTITY (CNPJ)

The procedure takes place in two steps:

1. The company’s legal representative must first create a personal registration (CPF) in the FGC app;

2. Then, they must access the FGC web portal via browser (www.fgc.org.br) and add the linked company, completing the credit authorization in the name of the legal entity.