Paraguay has been plunged into a political and financial crisis following the reported impeachment of President Santiago Peña over allegations linked to the collapse of Ueno Bank, which left millions of customers unable to access their money.
The Senate voted unanimously on Friday, November 6, to remove Peña from office over alleged misconduct surrounding the collapse of the digital bank, which had grown into one of the country’s leading financial institutions.
The bank’s failure triggered public outrage after its services were suspended, leaving approximately three million customers unable to access their accounts. The disruption affected salaries, personal savings and other financial transactions.
The crisis also raised questions over public funds, with Ueno reportedly holding about $850 million in government-linked deposits, including money belonging to the country’s social security and pension system.
Lawmakers accused Peña of using his political influence to channel public funds towards the bank while regulators allegedly ignored questionable lending practices and financial irregularities.
Peña, however, denied wrongdoing, maintaining that the allegations should be addressed through the appropriate legal channels.
His reported removal came a day after he announced his resignation amid mounting political pressure and demands for accountability. However, lawmakers proceeded with impeachment proceedings, arguing that the allegations required formal determination.
Following his removal, Peña was reportedly placed under house arrest in the capital, Asunción, as prosecutors prepared to question him over alleged breach of trust, influence peddling and misuse of public office.
Vice President Pedro Alliana was subsequently sworn in to complete the presidential term, which runs until 2028.
The banking crisis has also sparked protests, with affected customers demanding access to their money and accountability from those responsible.
Authorities have reportedly begun arrangements to compensate depositors through a state-backed guarantee scheme as investigations into the bank’s collapse continue.
The developments mark a significant political crisis for Paraguay, which has experienced major political upheavals since the end of military rule in 1989.
