Paraguay In Political Turmoil As Lawmakers Seek President’s Impeachment After Bank Collapse Locks Out 3 Million Customers
Paraguay is facing a major political and financial crisis after the Central Bank took over Ueno Bank, the country’s largest digital lender, following the discovery of serious financial irregularities and a breach of minimum solvency requirements.
The takeover reportedly disrupted the bank’s mobile application, credit card and transfer services, leaving approximately 3 million customers without immediate access to their accounts.
The affected customers represent nearly 60 per cent of Paraguay’s adult population, with many reportedly unable to access their savings and pension funds.
The development sparked widespread protests as angry residents took to the streets demanding that the government restore access to their money.
The crisis has since escalated into a political battle, with opposition lawmakers pushing for the impeachment of President Santiago Peña over allegations of conflicts of interest, misuse of pension funds and an alleged institutional cover-up.
Thirty-five lawmakers submitted impeachment articles in the country’s 80-member lower house and requested an extraordinary session on Thursday to deliberate on the president’s fate.
The opposition also questioned Peña’s previous business relationship with Grupo Vázquez, the parent company controlling Ueno Bank. The president reportedly held shares in the company until March 2025.
Meanwhile, the crisis has already claimed the position of Central Bank President Carlos Carvallo, who resigned on Tuesday.
Authorities have also issued arrest warrants for eight senior executives of Ueno Bank. The executives reportedly surrendered to prosecutors, while a court ordered their assets frozen as investigations continued.
Speaking during a congressional session, opposition lawmaker Rocío Vallejo accused Peña’s administration of causing unprecedented hardship for millions of citizens.
“Never before has anyone harmed 3 million people in a single day in the Republic of Paraguay, and you achieved it, Mr. President,” she said.
Although Peña has yet to publicly respond directly to the impeachment move, he urged political leaders to prioritise depositors’ interests, promising that anyone found responsible for irregularities would face justice without exceptions.
The opposition, however, remains short of the two-thirds majority required to advance the impeachment proceedings, despite gaining support from some members of the ruling Colorado Party.
The situation has also triggered concerns across the banking sector, with several banking applications reportedly experiencing outages amid a surge of customers attempting to move their funds.
The Association of Banks of Paraguay has maintained that the country’s financial system remains stable, saying other lenders are working to accommodate customers transferring their accounts from Ueno Bank.
The unfolding crisis is now threatening to undermine Paraguay’s reputation as a stable destination for foreign investment, particularly from neighbouring Brazil.
