Lawmakers accused Santiago Peña of steering public funds towards Ueno Bank, whose collapse left about three million customers unable to access their accounts.
The Paraguay banking crisis has reportedly led to President Santiago Peña’s impeachment after Ueno Bank’s collapse froze access to millions of customers’ accounts.
The Senate reportedly voted unanimously on Friday, November 6, to remove Peña over alleged misconduct involving the digital bank. However, Peña denied wrongdoing and maintained that the allegations should go through the appropriate legal channels.
Ueno had grown into one of Paraguay’s leading financial institutions before its failure triggered public anger.
Paraguay banking crisis puts public deposits in focus
The suspension of Ueno’s services left approximately three million customers unable to access their money. The disruption affected salaries, personal savings and other financial transactions, prompting protests from customers demanding access to their funds.
Meanwhile, the crisis raised concerns about public money held at the bank. Ueno reportedly held about $850 million in government-linked deposits, including funds belonging to Paraguay’s social security and pension system.
Lawmakers accused Peña of using his political influence to direct public funds towards Ueno. They also alleged that regulators overlooked questionable lending practices and financial irregularities.
Authorities have reportedly begun arranging compensation through a state-backed deposit guarantee scheme. Investigations into the bank’s collapse also continue, while affected customers demand accountability.
Alliana takes office after reported removal
Peña’s reported removal followed his resignation announcement a day earlier, amid mounting political pressure and demands for accountability. However, lawmakers continued the impeachment process, arguing that the allegations required a formal determination.
Following his removal, Peña reportedly entered house arrest in the capital, Asunción. Prosecutors were preparing to question him over alleged breach of trust, influence peddling and misuse of public office.
Vice President Pedro Alliana subsequently took the oath of office to complete the presidential term, which runs until 2028.
The leadership change comes as customers press for access to their savings and authorities pursue depositor compensation. Paraguay has experienced major political upheavals since military rule ended in 1989.
