By Brazil Stock Guide – Brazil’s Deposit Guarantee Fund (FGC) has begun the operational phase to compensate clients of Banco Master after the Central Bank ordered the extrajudicial liquidation of four entities in the group on Nov. 18, 2025. The decision — formalized through acts 1,369, 1,371, 1,372 and 1,373 — covers Banco Master S.A., Banco Master de Investimento, Banco Letsbank and Master Corretora de Câmbio. Actual payouts will only begin once the Central Bank’s appointed liquidator delivers a consolidated list of creditors, grouped by taxpayer ID, a step that typically takes around 30 business days.
Once that data is received, individuals will be able to file claims via the FGC’s mobile app, while companies will use the Investor Portal. The process includes identity verification, biometrics, document uploads, subrogation-term signature and the designation of a same-holder bank account. Payments are released after these steps, typically within 48 working hours. The simultaneous liquidation of four entities adds complexity to the reconciliation of accounting records and registry information, which must flow through registrars such as B3 before reaching the liquidator and the FGC.
The Master case activates Brazil’s standard deposit guarantee — covering checking accounts, savings, CDBs, RDBs, LCIs, LCAs, LCDs and similar instruments up to R$ 250,000 per CPF/CNPJ per institution or conglomerate — and could also trigger special-guarantee payouts for DPGE deposits, which can reach R$ 40 million per holder. The FGC reiterated that no intermediary is authorized to charge fees or offer services related to payout claims. Investors who do not appear in the initial list must present trade notes and statements directly to the liquidator for inclusion.
The fund currently holds approximately R$ 120 billion in reserves, according to market participants. By contrast, estimates indicate that Banco Master had issued more than R$ 40 billion in interest-bearing instruments across its multiple entities — a volume that magnifies the complexity of the liquidation and the scale of potential claims. Depending on how much of that stock falls under the guarantee umbrella, banks may need to replenish FGC reserves through additional contributions, a mechanism already embedded in the system and expected to be activated as the exposure becomes clearer.
The FGC is financed entirely through mandatory monthly contributions from banks and other associated institutions. The private, industry-funded model is designed to shield public finances while ensuring collective responsibility across deposit-taking institutions. The structure emerged in the aftermath of the mid-1990s PROER program, Brazil’s sweeping bank-restructuring plan that stabilized the financial system after a wave of failures. Nearly 30 years later, the FGC remains the country’s primary tool to prevent bank runs and contain contagion during stress events.
But the rise of digital investment platforms and high-volume distribution of credit products has introduced new systemic-risk dynamics. Platforms can direct billions in deposits toward mid-size banks within days, accelerating balance-sheet growth, heightening concentration and increasing vulnerability to liquidity shocks. The Master liquidation is now viewed as a real-world stress test of how Brazil’s resolution framework performs in an era of fast retail flows, distributed origination and platform-driven funding.
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