Paraguay’s Congress has rejected President Santiago Peña’s resignation and commenced impeachment proceedings against him following the collapse of digital lender Ueno Bank, which left millions of customers unable to access their funds.
Peña, who has been in office since 2023, announced his resignation on Thursday amid growing scrutiny over his alleged links to the failed financial institution.
However, lawmakers refused to accept his departure, opting instead to pursue his removal through impeachment.
The lower house of Congress voted unanimously, 78-0, to impeach the president, while the Senate initiated proceedings and summoned him to appear on Friday.
A joint congressional session convened to consider his resignation failed to reach a quorum after members of Peña’s Colorado Party walked out.
Former Paraguayan President and Colorado Party leader Horacio Cartes had earlier expressed support for the impeachment, condemning the alleged mismanagement of funds.
“We will not side with the theft of public, private and pension funds,” Cartes, a former president, wrote in his statement.
“We must think of the people and the values we uphold in the Colorado Party.”
The rejection of Peña’s resignation could expose him to further legal consequences.
Under Paraguay’s political system, former presidents typically become senators for life and enjoy a degree of immunity from prosecution.
However, such privileges are not granted to a president convicted during an impeachment trial.
The crisis followed an announcement by Paraguay’s central bank that Ueno had fallen below the statutory solvency ratio.
Following an adjustment of its financial records, the lender’s capital was found to be less than half the minimum required by law.
The bank, which reportedly had about three million customers in a country with a population of 6.5 million, had also handled pension payments and public funds.
The central bank has since approved the transfer of Ueno’s remaining funds to other financial institutions as part of efforts to address the collapse.
Its governor, Carlos Carvallo, also resigned amid criticism over the regulator’s supervision of the lender.
Peña previously owned shares in Grupo Vazquez, Ueno’s parent company, but said he disposed of his stake in 2025.
Legislators have nevertheless questioned whether his former business interests created a conflict of interest and raised concerns about a possible cover-up surrounding the bank’s financial difficulties.
“He is accused of negligence at the very least and complicity in covering up the fact that the bank was insolvent,” said Al Jazeera’s Latin America editor Lucia Newman.
“As I speak, there are people outside urging Congress not to accept the resignation of the president because they say that they want him tried and impeached.”
Before its collapse, Ueno expanded rapidly from a niche financial company into a mid-tier bank, managing nearly $850m in public funds.
Paraguay’s attorney general has ordered three criminal investigations into the lender’s failure, focusing on regulatory oversight and the allocation of public funds.
Peña has pledged to cooperate with the investigations.
“My greatest wish is that the return of those funds be guaranteed, that the deposit guarantee fund fulfil its purpose, and that public funds – as well as the resources that belong to all Paraguayans – be protected,” Pena added in his address.
If Peña is removed from office following the impeachment process, Vice President Pedro Alliana is expected to succeed him as president.
Ueno Bank has yet to issue a public statement on the crisis.
