Paraguay Bank Collapse: Inspectors Flagged Risky Loans Months Before Ueno Fell

Central bank inspectors found a pattern of risky lending to insiders at Paraguay's Ueno Bank in June, months before regulators seized it, according to the Paraguayan newspaper ABC Color, as cited by NBC News. President Santiago Peña, who resigned Thursday, repeatedly dismissed such concerns, NBC reported.

The bank held public money, including pension funds, and its failure has frozen savings for millions of people. The figures below show how large the exposure was and how much is still unresolved.

The key numbers behind the Ueno collapse

• 2.94 million customers. DW reported that Ueno served about this many people, roughly 60% of Paraguay's adults. NBC put the share at more than 60%.
• About $800 million in public deposits. DW and NBC said Ueno reported this sum as of last month, about a quarter of its total deposits. It included money from the operators of Paraguay's giant hydroelectric dams. NewsCord, citing the central bank, gave a figure of around 850 million dollars, so reports differ.
• $355 million from the pension fund. The Social Security Institute, which manages pension and health care funds for most Paraguayan workers, had this amount at the bank. DW said that was about 9% of its investments, citing financial manager Gladys Vera.
• Less than half the legal minimum. After regulators corrected Ueno's books, its capital fell below this level, NBC reported. DW said the same of its solvency ratio.
• Nearly $39 million in one day. ABC Color reported that on a single day in September 2025 this sum went to three companies tied to the bank's owners.
• Eight detained, 27 charged. Authorities detained eight senior executives, including founder Miguel Vázquez and bank President Juan Manuel Gustale. Prosecutors charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud.

What the warnings and political ties show

According to NBC, inspectors found that Ueno had lent large sums to companies tied to its owners, beyond what the law allows and without enough collateral. NBC said Peña defended Ueno and the central bank's oversight as recently as last month, calling the concerns a smear campaign.

The impeachment motion, as described by DW, accuses Peña of conflicts of interest, misuse of pension funds and institutional cover-ups. It points to two loans he received from Ueno and to his sale of shares in Ueno Holding in April 2025. It also questions his 2023 appointment of central bank chief Carlos Carvallo, who had previously chaired Financiera Ueno. The motion says the central bank approved the company's conversion into a bank 83 days after that appointment.

Carvallo resigned at Peña's request on Wednesday, NBC reported. Pedro Acosta Bernal was appointed interim central bank president and said, “The banking system is sound.” No wrongdoing by Peña has been established; the allegations are claims made by lawmakers.

Why it matters for depositors and workers

For ordinary Paraguayans, the immediate problem is access to money. DW reported that Ueno's app, card payments and transfers stopped working and its branches closed, leaving customers queuing outside. The central bank said it plans to move customer accounts and any assets that retain value to other banks before liquidating the rest, according to NBC.

Officials said they have begun repaying depositors, NBC reported, and have opened new accounts at other banks for about 280,000 people who banked only with Ueno. NBC also said a rush to open accounts elsewhere crashed other banks' mobile apps on Wednesday, adding to public panic.

Workers face a separate problem. NBC said 7,000 employees affected by the closure are owed unpaid wages. Hundreds of staff from Ueno and other companies in its parent group protested outside the Labor Ministry on Thursday, demanding wages and severance. Peña said in a video message Wednesday that he would seek legislation to return to every saver what they are entitled to as quickly as possible, DW reported.

What happens next in Congress

Under Paraguay's Constitution, Congress must accept or reject the president's resignation, NBC reported. Vice President Pedro Alliana is in line to succeed him.

The impeachment push was still under way when Peña stepped down. Thirty-five opposition lawmakers and ruling-party dissidents had submitted articles in the 80-seat Chamber of Deputies, according to DW. NewsCord said the process required 53 votes in the lower house and then two thirds of the Senate. Accounts differ on how far the vote had gone: NewsCord said the lower house voted to pursue a trial, while DW and NBC described lawmakers as still debating.

Peña said in his video that he was acting for the country's stability and democratic institutions. NBC said he apologized but stopped short of accepting responsibility for the crisis. DW reported that Peña lost the support of Congress President Basilio Núñez and Colorado Party leader Horacio Cartes before he stepped down. Lawyers for several detainees said they needed time to review the allegations before commenting.

Earlier on Around Prague: Paraguay's President Resigns Days After Ueno Bank Failure Freezes Deposits

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Around Prague, based on reporting by DW.com, NewsCord, NBC 5 Dallas-Fort Worth