Paraguay President Quits After Digital Bank Collapse Leaves 3 Million Customers Locked Out of Their Accounts

Paraguay President Santiago Peña offered to resign on Thursday, 5 November 2026, after Ueno Bank's collapse left customers across the country unable to access their accounts. The digital lender had around 3 million customers.

The central bank seized Ueno on Tuesday after determining that its capital had fallen below the legal minimum. Its app, cards and transfers ceased operating, cutting customers off from savings, wages and benefits.

Paraguay President Faces Senate Trial

Both houses of Congress declined Peña's resignation offer, and the lower house voted unanimously to impeach him. A Senate trial was scheduled for Friday, 6 November, with Vice President Pedro Alliana next in line if Peña were removed.

The crisis also cost Peña support within his Colorado Party. Opposition senators argued that accepting his resignation would preserve his eligibility to become a senator for life, carrying legal protections that could obstruct prosecution if charges were filed.

The prosecutor's office announced three criminal investigations into the crisis on Thursday, including allegations involving Peña and other current and former officials. Investigators will examine regulatory oversight, the handling of Ueno's failure and the placement of public funds.

Peña has denied wrongdoing and maintained that the affair should be handled by the courts. He pledged cooperation. 'Whatever the outcome of this process, I will act with responsibility and respect for the Constitution,' he wrote on X.

Paraguay President Urges Payments For Stranded Customers

Peña called for urgent action for account holders. 'Clarifying the facts and resolving the payments are obligations that must advance at the same time,' he stated on social media.

Legislation passed on Wednesday requires a state guarantee fund to repay stranded depositors within five business days, beginning with small accounts on Thursday. The central bank estimates that deposit insurance will cover the full balances of 97% of clients.

The disruption extends beyond savings. The Labor Ministry estimates that about 7,000 direct and indirect jobs have been affected at Ueno and related businesses. Employees gathered outside the ministry on Thursday, demanding severance and unpaid wages.

Past Bank Ties Put Paraguay President Under Scrutiny

Peña stated that he sold his stake in Grupo Vazquez in March 2025, when the business group ceased owning Ueno.

His administration placed public money with the lender, including funds linked to pensions. Peña also appointed Carlos Carvallo, president of Ueno's predecessor company, to lead the central bank responsible for supervising it.

ABC Color reported that central bank inspectors identified risky lending to companies tied to Ueno's owners in June. Those loans exceeded legal limits and lacked sufficient collateral.

The central bank subsequently identified poorly documented lending and expenses wrongly classified as assets. Correcting those entries reduced Ueno's capital, its cushion against losses, to less than half the legal minimum.

Prosecutors charged 27 bank officials and associates with breach of trust and attempted fraud.

'The president or board is not responsible for deciding who receives a particular loan,' bank president Juan Manuel Gustale's lawyer, José Fernández Zacur, told local media.

On Thursday, a judge ordered six executives, including Gustale and founder Miguel Vázquez, detained pending trial. Two others were placed under house arrest.