Can a Bank Collapse Bring Down a President? Ask Paraguay’s Santiago Peña

On October 29, Paraguay’s Ueno Bank announced a plan to raise $100 million. A week later, its app had gone dark, protesters had marched on Congress and President Santiago Peña had offered his resignation.

Did Peña’s resignation take effect?

Peña was still president early on November 6. He offered to quit the previous day, saying he wanted to protect the country’s stability. Under Paraguay’s constitution, Congress must decide whether to accept a president’s resignation. The joint sitting lost its quorum, the minimum number of lawmakers needed to act. The lower house had already voted 78–0 to send the charges to the Senate, which opened a trial that evening.

What was Ueno Bank, and why did so many people rely on it?

Ueno started in 2021 and grew into a digital bank with about three million customers, by its own count, in a country of about 6.5 million. People used its app to pay bills, send money and save. About 32,000 pensioners used Ueno to collect state benefits.

Why couldn’t the $100 million plan save Ueno?

The money was still to be raised. Ueno said its controlling shareholder would contribute $50 million in November and a share sale to Paraguayan investors would bring in another $50 million. On November 2, the central bank’s board decided to intervene. In its November 3 announcement, the regulator said corrections to Ueno’s accounts had pushed its capital ratio below half the legal minimum.

What was wrong with Ueno’s books?

Ueno had far less protection against losses than its books had shown. Bank capital is the cushion that absorbs losses when, for example, borrowers stop repaying. The capital ratio measures that cushion against the risks the bank has taken. AP reported that inspectors examining loans to companies linked to Ueno’s owners found inadequate records and expenses that had wrongly been counted as assets.

Why did the app and cards stop working?

The regulator suspended Ueno’s operations while it worked out how to handle the failing bank and its deposits. That left customers unable to withdraw or transfer money they already had. Reuters reported that the central bank was working to move Ueno accounts to other institutions. Several other banking apps came under strain.

Why was Peña linked to the bank?

Peña held a stake in Grupo Vázquez, the business group behind Ueno. He says he sold it in March 2025, and Ueno says he never held a direct stake in the bank. Lawmakers also questioned why Peña had put Carlos Carvallo, who once ran Ueno’s predecessor, in charge of the regulator overseeing it. The central bank told Reuters that Carvallo stepped aside from decisions involving Ueno. He resigned after the intervention.

What are lawmakers accusing Peña of?

They allege he allowed Paraguay’s social security institute, known as IPS, to put more money into Ueno than the rules allowed. Reuters put the public funds Ueno administered at about $850 million, including money from state institutions and pension-related bodies. Peña denies wrongdoing. Prosecutors opened three separate inquiries, including into how the bank was supervised and how public money ended up there. A Senate ruling decides whether Peña keeps his office. Any criminal charges go to the ordinary courts.

How did 35 signatures turn into 78 votes?

The break came when Horacio Cartes, the former president who leads the ruling Colorado Party, withdrew his support for Peña. Thirty-five lawmakers had signed the original complaint. By the time the 80-seat lower house voted, 78 deputies backed the case against Peña. A separate bid to impeach his vice-president, fellow Colorado politician Pedro Alliana, received only 30 votes and failed.

Why put Peña on trial after he offered to quit?

The way Peña leaves determines whether he can take a seat in the Senate for life. Paraguay’s constitution gives elected former presidents that seat, with a right to speak but no vote. A president whom the Senate finds guilty in an impeachment trial loses that entitlement. Opposition senators argued that accepting the resignation could give Peña the parliamentary protections that come with the seat.

When can Ueno customers get their money back?

The first payments began on November 5. They went to customers with up to 10 million guaraníes in deposits, no debt to Ueno and an account at another bank or financial institution to receive the money. That threshold was for the first batch. Paraguay’s deposit insurance covers eligible balances up to 75 monthly minimum wages per depositor at a bank. Recovering amounts above that limit depends on what can be recovered from the failed lender.

Will pensioners miss their next payment?

The IPS says it will keep its November 17 payday. It is working with seven other banks to redirect payments. A pension already paid into a frozen account still has to go through the deposit recovery process. The IPS’s own reserves held at Ueno are a third pot of money. A bill to extend full deposit protection to public funds at the bank was sent to a Senate committee.

Could an Indian saver face a similar freeze?

Yes. Customers of Punjab and Maharashtra Cooperative Bank faced withdrawal restrictions before it merged with Unity Small Finance Bank in 2022. India’s deposit insurer said it had settled the main claim covering about 8.48 lakh traceable depositors. The case shows how a saver can still be owed money while losing the ability to withdraw it.

How much would deposit insurance cover in India?

Up to ₹5 lakh per depositor at an insured bank, including principal and interest. A savings account and a fixed deposit held in your own name at the same bank share that limit. Where the Reserve Bank imposes qualifying withdrawal restrictions, India’s deposit insurer has a 90-day claims timetable, subject to the bank submitting depositor records on time.

Can the Senate remove Peña on November 6?

Yes, if the trial reaches a vote and at least 30 of the 45 senators find him guilty. The Senate scheduled his defence for 10 am in Asunción. Peña said he would appear to “exercise my right to a defense”. If the Senate removes him, Alliana takes over for the rest of the term. Ueno’s depositors are on a different timetable. The first group has started getting its money back, and the central bank still has to announce who gets paid in the next round.