Paraguay President Impeached and Placed Under House Arrest After Ueno Bank Collapse
Paraguay President Impeached and Placed Under House Arrest After Bank Collapse
Paraguay’s President Santiago Peña has been impeached and placed under house arrest following the collapse of a major bank that left millions of people unable to access their savings.
The political crisis has shaken the South American country and triggered widespread protests over the loss of access to bank accounts.
The country’s Senate voted overwhelmingly to remove Peña from office on Friday, November 6. The decision followed allegations of misconduct connected to the collapse of Ueno Bank.
Authorities placed the former president under house arrest shortly after his removal. He is expected to appear before prosecutors as investigators examine allegations involving the bank and the use of public funds.
Vice-President Pedro Alliana has taken over as Paraguay’s new president. He is expected to serve the remainder of the presidential term, which ends in August 2028.
Senate Votes to Impeach Santiago Peña
The Paraguayan Senate voted 44 to 0 to impeach Peña, with one senator absent.
Lawmakers accused the president of poor performance in office and alleged misconduct linked to the banking crisis.
The impeachment followed several days of political pressure and public demonstrations.
Thousands of Paraguayans had taken to the streets demanding answers about the collapse of Ueno Bank.
Many protesters accused the government of failing to protect ordinary customers and public funds.
Peña had reportedly offered to resign before the impeachment vote. However, lawmakers continued with the proceedings and removed him from office.
The decision also removed the political protections associated with his position, leaving him exposed to criminal investigations.
Ueno Bank Collapse Leaves Millions Without Access to Money
The banking crisis began after Paraguay’s central bank intervened in Ueno Bank because of serious financial problems.
The regulator found that the bank had fallen below required solvency levels.
The intervention effectively froze customer accounts and disrupted access to savings, payments and other banking services.
Ueno had approximately 2.9 million customers, representing around 60 per cent of Paraguay’s adult population.
Many customers had opened their first bank accounts through the digital lender.
The collapse therefore affected a large section of the population, including pensioners, workers and small business owners.
Some customers could not withdraw cash or use their bank cards to purchase essential goods.
The disruption also affected businesses that depended on Ueno’s payment services.
The crisis quickly developed into a national financial and political emergency.
Allegations of Political Connections and Misuse of Funds
Investigators are examining Peña’s previous financial connections to Grupo Vázquez, the business group that controlled Ueno Bank.
The president reportedly held shares in a company that later became part of Ueno Holding.
He has said that he sold his stake in April 2025 and denied any wrongdoing.
However, opposition lawmakers have accused him of using political influence to benefit the bank.
They have also questioned the government’s decision to place public funds and pension-related money with the financial institution.
Reports indicate that Ueno managed hundreds of millions of dollars in public-sector deposits.
Investigators are examining whether political connections affected regulatory decisions and the supervision of the bank.
Peña denies the allegations, and prosecutors must establish any criminal responsibility through the legal process.
Pedro Alliana Becomes Paraguay’s New President
Following Peña’s removal, Vice-President Pedro Alliana was sworn in as the country’s new president.
Alliana has promised to protect depositors and ensure that affected customers recover their money.
He also faces the difficult task of restoring public confidence in Paraguay’s financial system.
The new president said the government would not abandon the millions of people affected by the banking crisis.
Authorities have already started a phased repayment process for some eligible customers.
The central bank has also said that deposit insurance covers approximately 97 per cent of Ueno’s customers.
However, many depositors are still waiting for access to their savings.
Protests Continue as Investigation Expands
The collapse of Ueno Bank has triggered demonstrations in the capital, Asunción, and other parts of the country.
Protesters have demanded the return of their money and accountability from government officials.
Police have maintained security around important government buildings and locations connected to the investigation.
The banking crisis has also affected businesses and employment, increasing economic pressure on ordinary families.
Investigators have arrested several bank executives and examined the activities of companies connected to the institution.
Former central bank chief Carlos Carvallo is also under investigation.
What Happens Next for Paraguay?
Peña’s impeachment marks a major political turning point for Paraguay.
The former president must now face the legal investigation without the protections previously associated with his office.
Prosecutors are expected to question him about alleged breach of trust, influence peddling and the handling of public funds.
Meanwhile, Alliana must focus on stabilising the financial system and restoring confidence among depositors.
The government also faces pressure to ensure that affected families and businesses recover their money.
The coming weeks will be important for both the investigation and the country’s economic recovery.
For now, Paraguay is dealing with one of its most serious political and financial crises in recent years, following the collapse of a bank that served millions of people.
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