Brazil Central Bank Shuts Down Banco Master, Mastercard Halts Cards

• Mastercard suspended Will Bank cards from its network due to non-compliance with payment settlement schedules, after the Master group had funds blocked as collateral
• Will's liquidation stems from worsening insolvency, conflicts of interest with parent Banco Master, and failed attempts to preserve operations through a market-based solution
• Banco Master was shut down in November 2025 amid a federal police fraud probe involving alleged trading of non-existent credit securities and serious regulatory violations

Summary: Brazil Central Bank Shuts Down Banco Master, Mastercard Halts Cards

Brazil's central bank ordered the liquidation of Will Financeira SA, a unit of troubled lender Banco Master, on January 21, marking the latest intervention in the distressed financial conglomerate. The action follows Mastercard's suspension of Will Bank cards from its network the previous day due to non-compliance with payment settlement schedules.

Key Developments:

The central bank cited Will's deteriorating financial condition, insolvency, and conflicts of interest stemming from its control by Banco Master, which was itself liquidated in November. The Master group has faced a severe crisis characterized by substantial short-term liabilities, illiquid assets, and funds blocked as collateral by Mastercard since last year.

Background:

Initially, regulators had avoided liquidating Will alongside Master on November 17, seeking a market-based solution to preserve the unit's operations. However, these efforts failed, making liquidation "inevitable," according to the central bank.

Banco Master, a mid-sized Brazilian lender, was shut down amid a federal police investigation into alleged fraud involving non-existent credit securities trading. The central bank also identified severe liquidity problems, sharp financial deterioration, and serious regulatory violations.

Market Implications:

The dual liquidation underscores Brazil's regulatory commitment to addressing institutional instability and fraud in the financial sector. The Mastercard suspension and subsequent collapse highlight significant counterparty risk issues within payment networks. The case raises concerns about oversight of mid-tier Brazilian financial institutions and may prompt increased regulatory scrutiny across the sector.

The failed rescue attempt suggests limited appetite among potential acquirers for distressed financial assets amid ongoing criminal investigations.