Paraguay Bank Collapse Freezes Accounts of 3 Million, Threatens President

The collapse of Ueno Bank, a fast-growing Paraguayan digital lender, has frozen the accounts of about 3 million customers and pushed President Santiago Pena toward impeachment, according to Al Jazeera and DW. Both outlets describe it as one of the country's most serious political and financial crises in years.

Paraguay's central bank put Ueno into resolution after finding it had fallen below minimum solvency requirements. Pena offered to resign, but Congress has not accepted that, and the Senate has opened impeachment proceedings. Pena has denied any improper ties to the bank.

The central numbers

• 3 million customers. That is the figure Ueno itself reported. Al Jazeera says it equals roughly 60 percent of Paraguay's adult population, while DW says it is almost half the country's population. Customers still cannot withdraw cash, make digital payments or use their cards, according to Al Jazeera.
• $800 million in public money. Al Jazeera, citing central bank data, says the bank managed this amount, including about $380 million from the state pension and health fund. DW, citing media reports, puts the total at 800 to 850 million dollars.
• $146 million in insider loans. Al Jazeera, citing the Paraguayan newspaper ABC Color, reports that Ueno lent this sum to companies tied to its owner, Grupo Vazquez. Regulators found the loans exceeded legal limits and lacked enough collateral.
• 27 people charged. Prosecutors charged them with offenses including breach of trust and attempted fraud. DW says the group includes eight Ueno executives and 19 others linked to companies associated with the bank.
• $1,600 and five business days. Congress passed a law creating a state-guaranteed fund to repay depositors within five business days, starting with accounts of up to $1,600, according to Al Jazeera.
• About $36,000 per customer. Al Jazeera says this is the insured limit, which the central bank says will fully cover an estimated 97 percent of customers. DW gives the protected limit as 37,600 dollars and says a separate provision allows about 20,000 dollars per saver to be paid early.

What is behind the collapse

Al Jazeera reports that regulators found Ueno's lending to companies linked to its owners was poorly documented and that the bank had wrongly counted some expenses as assets. Once its books were corrected, its capital fell to less than half the legal minimum.

DW adds that investigators are also asking whether some transactions were used to hide the capital shortfall, and why the central bank did not act sooner despite warning signs.

The political link is Pena's past business ties. Both outlets report he held a stake in Grupo Vazquez until March 2025. In 2023 he appointed Carlos Carvallo, a former head of Ueno's predecessor company, to lead the central bank. Carvallo has since resigned. Reports differ on the date of Pena's resignation offer: Al Jazeera says Thursday, while DW says Nov. 5.

What this means for depositors and the presidency

For ordinary savers, the immediate question is access to money. Small accounts are first in line for repayment under the new law, but DW says it is still unclear when all affected customers will be paid or what happens to balances above the protected maximum. Al Jazeera reports that retirees and workers owed wages were among those struggling after the freeze.

The public-money exposure matters beyond Ueno's customers. DW says the concentration of state funds in one institution raises questions about how public bodies make investment decisions, and it reports that other state institutions were said to have kept depositing money there.

For Pena, the manner of his exit carries legal weight. According to both outlets, opposition lawmakers say a resignation would let him become a senator for life, which would give him immunity from prosecution. Impeachment would remove that status. Paraguay's attorney general has ordered three criminal investigations, including allegations involving Pena and other current and former officials, Al Jazeera reports.

What happens next

Al Jazeera reports that Pena asked for 72 hours to prepare his defense, saying he had less than 12 hours to respond to a charging document with about 300 pages of attachments. “That is not due process,” he said. The Senate nonetheless moved to continue. DW says Pena has announced he will face the proceedings.

If he leaves office, Vice President Pedro Alliana would take over, and Congress would then have to elect a new vice president. The current term runs until August 2028, DW reports.

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Around Prague, based on reporting by Al Jazeera, DW