Paraguay President Santiago Peña Resigns Amid Banking Crisis, Impeachment Trial Set to Begin

Paraguayan President Santiago Peña announced his resignation after the seizure of Ueno Bank froze the savings of millions of customers, triggering protests across the country. However, lawmakers have put his resignation on hold and voted to begin impeachment proceedings over alleged misconduct and a conflict of interest linked to the bank.

Thousands of people gathered outside Congress in the capital, Asunción, on Thursday, demanding the return of their money and calling for Peña to face criminal charges. The crisis has affected depositors, including pensioners, while families say they have been left unable to access their savings.

Peña will remain in office provisionally as the political process continues. His impeachment trial is scheduled to begin on Friday.

Ueno Bank Collapse Leaves Millions Unable to Access Savings

Paraguay’s Central Bank took control of Ueno Bank after finding that the lender had fallen below the required solvency levels. The intervention froze access to accounts and savings held by around three million customers, including pensioners.

The bank also handled substantial public funds, including money linked to state pension and health institutions. Its collapse raised questions about regulatory oversight and Peña’s previous business links to the financial group that controlled the lender.

Long queues formed outside Ueno branches in the capital, Asunción, as customers tried to withdraw their money. Demonstrators took to the streets, demanding the return of their savings.

"Give back the money," protesters shouted outside Congress. Police used tear gas and water cannons to disperse demonstrators during earlier protests.

Andres Maldonado, a 21-year-old student, told AFP that his family had run out of money and had no cash available. He called for Peña to be jailed.

Peña Resigns, but Congress Proceeds With Impeachment

Peña announced his resignation on Thursday, apologising to Paraguayans and saying he had never intended to betray their trust.

He said his priority was to restore confidence among people who had entrusted their savings to the country's financial system.

However, lawmakers proceeded with impeachment proceedings rather than accepting his resignation. They accused him of misconduct and a conflict of interest over his links to Ueno Bank. Peña denied wrongdoing.

The Senate voted to impeach and remove him on Friday, with 44 of 45 senators supporting the motion. Vice-President Pedro Alliana was subsequently sworn in as Paraguay's new president and will serve the remainder of the term, which runs until August 2028.

Families Say Bank Crisis Has Left Them Without Homes

The financial crisis has affected families who were relying on funds held by Ueno.

Nadia Gonzalez, a 26-year-old mother of three, told AFP that the bank had approved a loan to help her family buy their first home, but the money was never disbursed.

She said the family was now left with nowhere to live.

Peña had previously tried to contain the fallout by seeking the resignation of Central Bank President Carlos Carvallo and setting a five-day deadline for customers to receive their funds. Both measures failed to ease public anger.

Interior Minister Enrique Riera also resigned on Thursday. The crisis has since led to the removal of senior officials and investigations into the bank's collapse.

New President Faces Pressure to Return Depositors' Money

Alliana now faces the challenge of restoring confidence in Paraguay's banking system and addressing the concerns of millions of affected customers.

The Central Bank has said that its intervention was intended to protect depositors and preserve financial stability. Authorities have also begun releasing some payments to eligible customers, while promising further updates on the repayment process.

The collapse has also triggered investigations into Ueno's financial position, its lending practices and the handling of public funds. Peña is facing scrutiny over his past links to the group that controlled the bank, allegations he has denied.