Paraguayan president resigns amid bank collapse leaving 3M people without access to bank accounts

[Paraguayan President Resigns Amid Banking Crisis, Millions Lose Access to Accounts]

Paraguayan President Santiago Peña has resigned on Thursday following a banking crisis that preceded a unanimous vote by the Chamber of Deputies to impeach him.

Ueno Bank, which was placed under intervention earlier this week, serves approximately three million customers who have suddenly lost access to their accounts.

Protests have erupted across South America after the central bank assumed control of Ueno Bank on Tuesday, citing a severe capital shortfall.

Peña, a close ally of U.S. President Donald Trump, announced his resignation in a video posted to X while lawmakers debated his impeachment, stating he was stepping down for the “stability of our country, social peace, and the need to preserve our democratic institutions.”

“I want to apologies to the people if at any point I failed. It was never my intention to betray the trust you placed in me,” the right-wing president declared in the video.

The Paraguayan president, who until last year held a stake in a company related to Ueno Bank, expressed contrition but refrained from accepting responsibility for the banking crisis that has plunged a South American nation long prized by foreign investors for its stability into financial and political turmoil.

Some three million people lost access to bank accounts

Long lines of individuals attempting to withdraw funds from Ueno branches snaked down Asunción’s streets on Tuesday and Wednesday, while angry protests swarmed the capital in both evenings.

Regulators investigating the bank uncovered poorly documented lending practices and improperly accounted expenses as assets. However, after corrections were made, Ueno’s capital fell half below the legal minimum, prompting the central bank to seize the lender.

Ueno’s mobile application, cards, and transfer services went offline, and its branches closed their doors, leaving desperate depositors queuing outside without a way to access their savings. On Wednesday, a surge in attempts to open new accounts at other banks caused additional chaos and panic across the country.

“In the face of these accusations, I cannot pretend to be oblivious,” said ruling party deputy Alejandro Aquilera during the debate. “More than three million Paraguayans have been harmed, betrayed, swindled, and deceived.”

Ueno claimed 60% Paraguay’s adults as customers

Ueno Bank, which rose from an obscure finance firm to a nationwide household name within five years, claimed more than 60% of Paraguay’s adult population as customers. They are now scrambling to recover savings, government pensions, and, for 7,000 affected employees, unpaid wages.

Many Paraguayans question how a financial institution linked to the president—who held a stake in Ueno’s holding company until last year—grew so rapidly despite repeated warnings about its questionable lending practices.

The root cause lies in the close relationship between Peña’s ruling Colorado Party and the country’s regulatory and business elite, a dynamic that has persisted despite steady economic management and strong growth that made Paraguay attractive to international investors.

“Santiago Peña and the Colorado Party have stolen all our savings,” declared Luis Pineda, a protester marching to Congress on Wednesday. “We are fed up with seventy years of plunder.”

Following its 2023 banking license approval, Ueno rapidly expanded throughout Paraguay. The digital lender, a rebranded version of a longstanding finance company, lured customers with generous grocery cash-back promotions, grew to over 70 locations, sponsored the national soccer team, and prominently displayed its name at the country’s primary stadium.

Ueno highly financed by Peña’s government

Government resources flowed into Ueno Bank under President Peña, with him also appointing Carlos Carvallo, president of Financiera Ueno, the predecessor to Ueno Bank, to lead the central bank.

By the previous month, Ueno reported holding approximately $800 million (€712 million) in public deposits, representing about a quarter of its total assets, including contributions from the state pension and health fund and operators of Paraguay’s major hydroelectric dams.

Despite mounting concerns, the central bank’s internal worries intensified. In June, inspectors discovered a pattern of risky lending to insiders, reported by ABC Color, a leading Paraguayan newspaper.

Ueno had extended substantial sums to companies connected to its owners, exceeding legal limits and lacking sufficient collateral to cover potential default obligations. On a single day in September 2025, nearly $39 million (€35 million) was disbursed to three such companies.

Peña repeatedly brushed off the warnings. As recently as last month, he defended Ueno and the central bank’s oversight, dismissing the concerns as a smear campaign that was spooking the public.

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