The municipality of Itaquaquecetuba, located in Greater São Paulo, has decided to suspend its agreement with Banco Master, which enabled municipal employees to take out payroll loans. This action was taken as a preventive measure by city officials after the bank came under investigation by the Federal Police. The investigation initiates concerns over possible fraud, diversion of funds, and interference in regulatory decisions involving the bank, prompting local authorities to act swiftly to protect their employees' financial interests.

In addition to the Federal Police, other regulatory bodies such as the Central Bank of Brazil, the Federal Court of Accounts, and the Supreme Federal Court are also involved in this investigation. The suspension of the agreement is significant as it was originally in effect from September 2024 until November 2025, signaling a precautionary approach from the municipality in light of the ongoing inquiries. While the suspension halts new loans from being issued, existing deductions from employees’ salaries that are currently under review are undergoing legal evaluation to determine the necessary administrative actions to be taken.

This situation highlights the increasing scrutiny of banking practices in Brazil and emphasizes the need for transparency and accountability in financial dealings, particularly those involving government entities and their employees. The involvement of multiple regulatory authorities underscores the seriousness of the allegations against Banco Master and signals ongoing vigilance regarding financial institutions operating within the public sector.