Paraguay’s new government has begun emergency payouts to depositors of the collapsed Ueno Bank, as President Pedro Alliana moves to contain a financial and political crisis that toppled his predecessor within days. The new Alliana administration and the central bank have begun emergency payouts to depositors — about 1.196 million accounts and roughly 996 billion guaranies in an initial phase — but many large balances remain uncovered and public protests and labour actions continue.
Alliana was sworn in on Friday after the Senate removed Santiago Pena from office over the collapse of the digital lender, which froze the accounts of nearly three million customers. Alliana has called for Ueno account holders to be reimbursed immediately, starting with the most vulnerable, and has begun naming members of a new government on his opening days in office.
The bank was seized by regulators on 3 November after its solvency ratio fell below half the legal minimum. The collapse disrupted access to savings for millions of customers and triggered corruption charges against Pena, who was ordered held in pretrial detention at a military facility on Saturday. Prosecutors allege Pena used presidential influence to encourage public agencies and state-owned institutions to maintain deposits with the bank.
A president under investigation too
Alliana, who will serve out the remainder of Pena’s term through August 2028, is himself under investigation in connection with the bank, according to the Associated Press. That detail, reported on Monday, complicates the new president’s promise to clean up the crisis — the man now in charge of the payouts is also a subject of the wider inquiry into Ueno.
Prosecutors say between 2023 and 2026 large public and pension deposits were placed, renewed or kept at Ueno Bank and that those transfers may have favoured companies linked to Ueno Holding. The criminal inquiry already includes at least 27 executives and founders of Ueno, and prosecutors have sought measures to identify and freeze assets of Pena, former central bank chief Carlos Carvallo and other suspects. Carvallo was also ordered held in pretrial detention.
Pena offered his resignation on Thursday, but Congress declined to accept it and pressed ahead with impeachment, stripping him of the immunity he would have kept had he stepped down. The Senate removed him on Friday, with all 44 senators present voting in favour. Pena has pleaded not guilty, denies wrongdoing, and could face up to 20 years in prison if convicted.
What depositors face
For the nearly three million customers whose accounts were frozen, the emergency payouts are only a first step. About 1.196 million accounts are covered in the initial phase, according to reports, leaving many large balances uncovered. Protests outside Pena’s home preceded his move from house arrest to military custody, and labour actions continue as depositors demand full reimbursement.
Alliana’s government must now balance the payout programme against the criminal investigation, the central bank’s stability measures and the political fallout of a presidential removal that has shaken Paraguay’s institutions. The Senate’s removal of Pena made him the second Paraguayan president ousted by impeachment since the end of the Stroessner dictatorship in 1989.
Related coverage: Paraguay Judge Orders Ousted Pena Held in Pretrial Detention ; Paraguay Swears In Alliana as Ousted Pena Faces Prosecutors
