President of Paraguay resigns amid crisis over bank collapse that left millions unable to access their money

Paraguayan President Santiago Peña resigned from office this Thursday after Ueno Bank was shut down in the middle of the night due to a solvency crisis, leaving millions of customers unable to access their money and triggering a scandal, CNN reports.

“I have made the decision to submit my resignation from the Presidency of the Republic. I do so with the stability of our country, social peace, and the need to preserve our public institutions in mind,” he said in a message posted on social media.

Soon after he submitted his resignation, Paraguay’s Chamber of Deputies voted unanimously to trigger impeachment proceedings. It happened during a special session to debate charges brought by 35 opposition lawmakers and ruling-party dissidents against Peña.

The Senate will determine whether the proceedings will move forward or whether to accept his resignation.

The charges accuse Peña of alleged “serious and systematic dereliction of duty” and proposed “removing from office” the president, who took power in August 2023 for a five-year term.

“History will judge and give due consideration to the events we are experiencing today,” Peña said. “I apologize to the people if I have failed them at any time.”

Paraguay’s president became embroiled in the crisis that erupted after the intervention of Ueno Bank, a private institution to which he has been linked and which, during his administration, received millions in funds from public entities, including the Social Security Institute (IPS), which manages the pensions of most of the country’s workers.

The Central Bank of Paraguay found that Ueno Bank’s solvency ratio — with 2.9 million customers in a country of 6.1 million people — had fallen below 50% of the required minimum, “as a result of adjustments made to its financial statements during the regularization process.”

As a result of the resolution or dissolution proceedings, the savings of thousands of customers were frozen at the financial institution, which is also known for sponsoring local soccer teams and Paraguay’s national team.

Paraguay's central bank seized Ueno Bank on Tuesday, locking an estimated 3 million customers out of their money and setting off street protests and an impeachment bid against President Santiago Peña. The central bank's board voted unanimously late Monday to put the digital lender into "resolution," the regulator announced, after Ueno's solvency ratio fell below half the legal minimum. Customers could not withdraw or transfer a guaraní.

Ueno says its customers number about 3 million, roughly 60% of Paraguay's adult population, though Paraguayan press counts put the number of account holders nearer 1.7 million. It was also holding between $800 million and $850 million in public money, including about $380 million from the state pension and health fund, known as IPS. The central bank's own criminal complaint alleges that Ueno made large unsecured loans to companies inside its own corporate group and used new borrowing to cover repeated overdrafts, and describes an allegedly simulated $74.4 million sale of loans meant to hide that exposure, according to Diario HOY.

Central Bank seizes it after solvency ratio crashes and around 3 million customers are LOCKED OUT of app, cards & transfers.

Central Bank President Carlos Carvallo resigned right after pulling the plug.

The political problem is that Peña was a business partner of Ueno's owners until March 2025. The bank belongs to Grupo Vázquez, and Peña held shares in its holding company until an extraordinary shareholders' assembly cancelled his stake that month. He said in April 2025 that he was never a shareholder or investor in the bank itself, and Ueno says the same. He also appointed Carlos Carvallo to run the central bank in 2023, after Carvallo had chaired Ueno's predecessor, Financiera Ueno, until mid-2023. The central bank says Carvallo recused himself from every Ueno decision.

The collapse also impacts the narrative that Paraguay has been peddling to investors. The landlocked country won its first investment-grade ratings only recently on low taxes, light regulation and stability. It also ranked 150th of 182 countries in Transparency International's 2025 corruption index, tied with Bangladesh and the Central African Republic. Peña cannot seek reelection in 2028, and the crisis has already deepened a succession fight inside his party: Alliana had conditioned his own candidacy on the central bank clearing up doubts about the financial system.

The Chamber of Senators (the upper house) of the Congress of Paraguay has voted to impeach President Santiago Pena over his connection to the collapse of Ueno Bank, which triggered a political and financial crisis after access to 3 million accounts was frozen.

"44 votes were cast in favor of issuing a guilty verdict; one senator was absent. According to the voting results, the accused Santiago Pena Palacios is found guilty of improper performance of his official duties and, as a result, is removed from the office of president of the Republic of Paraguay by law," said Chairman Basilio Nunez.

read more in our Telegram-channel https://t.me/The_International_Affairs