Paraguay’s Ex-President Santiago Peña Under House Arrest After Senate Removes Him Over Ueno Bank Collapse

Paraguay’s former president, Santiago Peña, is under house arrest after the country’s Senate removed him from office over the collapse of a digital bank that left nearly three million people unable to reach their savings.

Police placed Peña under house arrest at his home in Asunción on Friday, 6 November 2026, shortly after lawmakers voted to impeach him. Prosecutors had ordered his arrest as part of a criminal investigation into the failure of Ueno Bank, a fast-growing digital lender that held hundreds of millions of dollars in public money.

It was a sudden end to a presidency that had lasted barely three years. Peña, a 47-year-old conservative economist, took office in August 2023 for a five-year term. Just four days earlier, almost nobody in Paraguay expected him to lose his job. Then the bank collapsed, savers took to the streets, his own party turned on him, and Congress moved against him in a matter of days.

This article explains what happened on Friday, how the crisis unfolded, what Ueno Bank was, why Peña was blamed for its failure, and what happens next for Paraguay and for the millions of people waiting to get their money back.

What happened on Friday

On Friday, 6 November, Paraguay’s Senate voted overwhelmingly to remove Peña from office for misconduct. The vote followed impeachment articles submitted by 35 opposition lawmakers and dissidents from his own ruling party in the 80-seat Chamber of Deputies.

The articles accused Peña of conflicts of interest, misuse of pension funds, and covering up problems at Ueno Bank. The vote cleared the way for Vice President Pedro Alliana to take over as president. Alliana will serve the rest of the presidential term, which ends in August 2028.

Removing Peña by impeachment, rather than letting him leave by resignation, had one important consequence. Former presidents in Paraguay are normally given a lifetime seat in the Senate and immunity from prosecution. By impeaching and convicting him instead, senators stripped Peña of both. That left him open to criminal prosecution — and prosecutors moved within hours.

After the Senate vote, prosecutors ordered the arrest of Peña and of Carlos Carvallo, the former chief of Paraguay’s central bank. Officials later said Peña would remain under house arrest while the public prosecutor’s office decides the final charges against him. Carvallo was arrested alongside him.

Dozens of protesters gathered outside Peña’s home in Asunción as police kept a security cordon around the property. For many of them, the house arrest was not enough. They want their savings back first.

How Peña fell in four days

The speed of Peña’s fall was extraordinary. Here is how it happened, step by step.

Tuesday, 3 November: Paraguay’s central bank ordered a process to close or wind down Ueno Bank after finding that its solvency ratio — a measure of whether a bank has enough of its own money to cover its risks — had fallen below half the legal minimum. The bank’s app, card payments and transfers stopped working. Branches closed. Customers queued outside, unable to withdraw their savings.

Wednesday, 4 November: Peña tried to calm the public in a video message. He promised legislation “that will return to every saver what they are entitled to as quickly as possible.” He also cancelled his trip to the Ibero-American summit in Madrid. On the same day, retirees, depositors, students and workers marched through Asunción demanding his impeachment, carrying signs that read “Give us back our money.”

Thursday, 5 November: The pressure became too much. Congress President Basilio Núñez and Horacio Cartes, the leader of the ruling conservative Colorado Party, withdrew their support for the president. Peña announced that he would resign. But Congress did not simply accept his resignation. Lawmakers pressed ahead with impeachment instead. That same day, hundreds of employees of Ueno and other companies in its parent group protested outside the Labour Ministry, demanding unpaid wages and severance pay.

Friday, 6 November: The Senate voted to remove Peña from office. Within hours, prosecutors ordered his arrest, and police placed him under house arrest at his home.

In less than a week, a president who had been in office for three years was out of power and under guard at home.

What is Ueno Bank, and why did it collapse?

Ueno was a digital bank — a bank that did most of its business online and through an app, rather than through branches. It was first licensed to operate as a bank in 2023, and it grew very fast.

By the time it collapsed, Ueno served about 2.94 million customers — roughly 60 percent of Paraguay’s adult population — in a country of about 6.5 million people. For many Paraguayans, it was their main bank account. It was also used to process pension payments.

The bank also held a large amount of public money. As of last month, it held roughly 800 million dollars in deposits from the public sector — about a quarter of all the money deposited at the bank. That included money from the operators of Paraguay’s giant hydroelectric dams and from the Social Security Institute, known as IPS, which manages pension and health care funds for most Paraguayan workers. IPS alone held 355 million dollars at Ueno, about 9 percent of its investments, according to its financial manager, Gladys Vera.

That is why the collapse hit so hard. This was not a small bank used by a few people. It held the savings of nearly half the country and hundreds of millions of dollars belonging to public bodies.

Paraguay’s central bank said Ueno’s solvency ratio had fallen below half of the required minimum. In simple terms, the bank did not have enough of its own money to be safe. The central bank stepped in on Tuesday and ordered the bank to be wound down. But the damage was already done: accounts were frozen, and millions of people could not get to their money.

Eight senior executives of the bank were detained, including its founder, Miguel Vázquez, and the bank’s president, Juan Manuel Gustale. Prosecutors also charged 27 bank officials and business associates with offences including breach of trust and attempted fraud. Courts ordered their assets frozen as the investigation widened.

Why was Peña blamed?

Peña had a personal business history with the group behind Ueno, and that history became the centre of the case against him.

He was a shareholder in Ueno Holding, the parent company whose businesses include the bank, until April 2025, when he sold his shares. Lawmakers also pointed to two loans he had received from Ueno, which they raised as part of their allegations of improper financial gain.

The impeachment articles also questioned his decisions as president. One was his 2023 appointment of Carlos Carvallo as chief of the central bank. Carvallo had previously chaired Financiera Ueno, a finance company in the same group. According to the impeachment document, the central bank approved Ueno’s conversion into a full bank just 83 days after Carvallo took the job.

Lawmakers also accused Peña of interfering improperly in the Social Security Institute, the IPS, and of giving Ueno preferential treatment — a serious charge, given that the IPS held 355 million dollars at the bank.

Peña has not been convicted of any crime. The criminal investigation is still at an early stage, and the public prosecutor’s office has not yet announced the final charges against him. His lawyers have not yet commented in detail on the allegations, and lawyers for several of the detained bank officials have said they need time to review the charges before commenting.

What is clear is that the political case against him moved faster than the legal one. Congress decided he had to go. The courts will now decide whether he broke the law.

Who is Pedro Alliana?

Pedro Alliana, who was Peña’s vice president, has now become president of Paraguay. He will serve the remainder of the term, which ends in August 2028.

Alliana was Peña’s running mate when the Colorado Party won the 2023 election. He is a long-standing figure in the party and a former president of the Chamber of Deputies. His first task is a difficult one: calming a country where millions of people cannot access their savings, and where trust in the banking system and in the government has been badly shaken.

The new president inherits a banking crisis, a criminal investigation touching the top of the previous government, and a public that is angry and frightened about its money.

What happens next

Several things will decide how this crisis ends.

The criminal case against Peña. The public prosecutor’s office must now decide the final charges against the former president. He will remain under house arrest until that decision is made. The charges are expected to relate to breach of trust and other offences linked to the banking scandal, but nothing has been formally announced yet. Former central bank chief Carlos Carvallo was also arrested.

The wider investigation. Prosecutors have already charged 27 bank officials and business associates. Investigators have seized assets and are examining other companies linked to the group behind Ueno. More charges may follow as the investigation widens.

The savers’ money. This is the question that matters most to ordinary Paraguayans. Peña promised legislation to return savers’ money “as quickly as possible,” but no such law has been passed yet. How much depositors will get back, and how soon, depends on what is left in the bank and on what the government and the central bank decide to do. Around 28,000 retired people and pensioners received their payments through Ueno Bank, so the freeze has hit some of the country’s most vulnerable people directly.

The new government. Alliana must rebuild confidence in the banking system and in the government itself. He must also work with a Congress that has just removed a president — an act that will shape Paraguayan politics for years.

Paraguay’s reputation. The crisis has already damaged confidence in the country’s financial system. Ueno’s rapid rise and sudden collapse will raise questions about how banks are supervised in Paraguay, and about the closeness between politicians and the financial businesses they once owned shares in.

Why this matters

It is easy to see this as a story about one president and one bank in a small South American country. But it matters for wider reasons.

First, it shows what can happen when a bank grows too fast with too little oversight. Ueno went from being licensed in 2023 to serving nearly half the adult population of Paraguay in about three years. When it failed, there was no cushion. Millions of people lost access to their money overnight.

Second, it shows the danger when public money is concentrated in one bank. Ueno held about 800 million dollars in public-sector deposits, including pension and health care funds. When the bank failed, the state itself became one of the victims.

Third, it is a test of whether Paraguay’s democratic institutions can hold a powerful person to account. Congress removed a sitting president in a matter of days. The courts must now decide, fairly and on the evidence, whether he committed a crime. The speed of the political process and the care of the legal process will both matter.

Finally, it matters for the millions of Paraguayans who simply want their savings back. For them, this is not a political drama. It is rent, food, medicine and school fees. Until their money is returned, the crisis is not over, whatever happens to the former president.

Frequently asked questions

Who is Santiago Peña?

Santiago Peña is the former president of Paraguay. A conservative economist, he took office in August 2023 for a five-year term. He was removed from office by the Senate on 6 November 2026 and placed under house arrest the same day.

Why was he placed under house arrest?

Prosecutors ordered his arrest as part of a criminal investigation into the collapse of Ueno Bank. He will remain under house arrest while the public prosecutor’s office decides the final charges against him. He has not been convicted of any crime.

What is Ueno Bank?

Ueno was a digital bank in Paraguay, licensed in 2023. It served about 2.94 million customers — roughly 60 percent of the country’s adult population — and held about 800 million dollars in public-sector deposits. Paraguay’s central bank ordered it to be wound down on 3 November 2026 after its solvency ratio fell below half the legal minimum.

Who is president of Paraguay now?

Pedro Alliana, who was Peña’s vice president. He will serve the rest of the presidential term, which ends in August 2028.

Will depositors get their money back?

That is not yet clear. Peña promised legislation to return savers’ money as quickly as possible, but no law has been passed yet. How much is returned, and how soon, will depend on what is left in the bank and on decisions by the government and the central bank.

What happened to the bank’s executives?

Eight senior executives were detained, including founder Miguel Vázquez and bank president Juan Manuel Gustale. Prosecutors charged 27 bank officials and business associates with offences including breach of trust and attempted fraud, and courts froze their assets.

Conclusion

In four days, Paraguay went from a banking crisis to a presidential removal to a former president under house arrest. Santiago Peña offered his resignation on Thursday. Congress chose impeachment instead. By Friday night, he was under guard at home, stripped of the immunity that former presidents normally receive, while his vice president took over the country.

The political drama is over for now. The harder work is just beginning: the criminal investigation, the fate of the frozen savings of nearly three million people, and the rebuilding of trust in Paraguay’s banks and government. Until the savers get their money back, the crisis that brought down a president will still be unfinished.

Sources

• Reuters, “Paraguay ex-president Peña placed under house arrest after impeachment”, 6 November 2026: https://srnnews.com/paraguay-authorities-order-ex-presidents-arrest-after-impeachment/
• Associated Press (via Vidia News), “Paraguay Senate dismisses President Santiago Pena over bank crisis”, 6 November 2026: https://vidianews.com/news/22131-paraguay-senate-dismisses-president-santiago-pena-over-bank-crisis
• Reuters, “Paraguay ex-president Peña placed under house arrest after impeachment” (Devdiscourse syndication), 7 November 2026: https://www.devdiscourse.com/article/international/4003030-paraguay-ex-president-pea-placed-under-house-arrest-after-impeachment
• Reuters, “Paraguayan President Peña Resigns Amid Digital Bank Collapse and Crisis”, 5 November 2026: https://www.globalbankingandfinance.com/paraguay-president-pe-resigns-mounting-pressure-bank/
• Wikipedia, “2026 Paraguay banking crisis” (timeline and background, accessed 7 November 2026): https://en.wikipedia.org/wiki/2026_Paraguay_banking_crisis

This article is for general information and education only. It is not legal or financial advice.