Police officers and human rights observers during demonstrations over the collapse of Ueno Bank in Asunción, Paraguay. Photo: MNP Paraguay

Last Tuesday, November 3, Paraguay’s central bank placed Ueno Bank, the country’s largest bank by number of customers, under regulatory control after discovering that it lacked sufficient capital to cover potential financial losses. Millions of customers lost access to their accounts, and regulators are now reviewing the bank’s finances and working to recover depositors’ money. 

Ueno Bank, which served approximately 60 percent of Paraguay’s adult population, had financial ties to President Santiago Peña, who previously held shares in the bank’s parent company. A group of 35 opposition lawmakers and members of the ruling Colorado Party filed impeachment charges against Peña, accusing him of conflicts of interest and improperly directing public pension funds into Ueno Bank. Peña announced his resignation two days after Ueno Bank’s collapse, but lawmakers rejected it. Congress impeached and removed him from office on November 6, and Vice President Pedro Alliana was sworn in as Paraguay’s new president to serve the remainder of Peña’s term through August 2028. 

Peña is now under house arrest and faces charges of breach of trust and administration for personal gain over his alleged involvement in the bank’s collapse. He denies any wrongdoing.

Paraguayans Protest Bank Collapse and Demand Accountability

Hundreds of Paraguayans, including university students and retirees, gathered in the capital, Asunción, to demand access to their savings and the removal of President Santiago Peña. “We demand justice. We're tired,” a young woman told the Paraguayan newspaper ABC Color. Another demonstrator told the outlet that the protests were about their future and retirement and urged young people and Ueno Bank employees to join.

It has been reported that police used pepper spray and rubber bullets against demonstrators, and that seven people, including a 17-year-old, were detained after allegedly throwing objects at a Ueno Bank branch and breaking its windows.

Approximately 1,000 public school teachers demonstrated in Coronel Oviedo on November 9, demanding better pay and protesting the financial crisis at Ueno Bank, which has put more than $60 million in public pension funds at risk. The teachers called on the government to recover the money and protect their retirement benefits.

The Rise and Fall of Ueno Bank

Since launching in 2022, Ueno has grown from a relatively unknown financial institution into one of Paraguay’s largest banks, holding roughly $800 million in public deposits, including state pensions and public health funds. Its growth accelerated in 2024 when it absorbed Visión Banco, acquiring its customers, loans, and deposits. By October 2026, Ueno had nearly three million customers and ranked fifth among Paraguay’s private banks by deposits and loans.

President Santiago Peña previously held shares in Ueno Holding, a company associated with Grupo Vázquez, which controlled the bank. Though he sold his shares in 2025, opposition Senator Rafael Filizzola accused his administration of giving Ueno Bank preferential treatment. “There was preferential treatment that allowed all of this,” Filizzola told ABC Color, alleging that Peña and central bank officials had facilitated the bank’s financial practices. Public funds accounted for roughly 25 percent of Ueno’s total deposits. Peña also appointed Carlos Carvallo, who previously served as president of Ueno Bank, to lead Paraguay’s central bank in August 2023. Carvallo has since resigned.

In June of this year, Paraguay’s Superintendency of Banks discovered that Ueno Bank had lent more money to companies connected to its owners than Paraguayan law permitted. The agency ordered Ueno to reduce those loans to the legal limit within ten days, and the bank reported that it had complied by June 15. However, investigators later found evidence that Ueno may have indirectly financed the $74.4 million sale of its loans to Vinanzas S.A., a company connected to its owners. Prosecutors have since charged 27 people associated with Ueno Bank and related companies over alleged financial misconduct.

What Happens Next?

Paraguay’s central bank has begun returning money to Ueno Bank customers through the country’s Deposit Guarantee Fund. On November 9, the bank reported that approximately 1.74 million depositors, representing 93.1 percent of Ueno’s depositors, had received advance payments totaling 2.126 trillion guaraníes (approx. $330 million). Paraguay’s Social Security Institute (IPS), which manages public pensions and healthcare benefits, still has more than $516 million tied up in Ueno Bank, including approximately $358 million in pension reserves and $157 million intended for health services and other operations. The IPS has filed a criminal complaint against Ueno Bank executives and central bank officials over the handling of its money, but it remains unclear how much of that money the institution will recover.

President Pedro Alliana has appointed economist Jorge Schreiner to lead Paraguay’s central bank, replacing Carlos Carvallo, who faces criminal charges related to the scandal. He has also pledged to make the recovery of public pension funds a priority for his administration.

“We will work until every family regains the peace of mind it deserves,” newly sworn-in President Pedro Alliana wrote on X on November 10.

As of November 10, prosecutors continue to investigate Ueno Bank’s financial dealings, including torn-up documents allegedly containing records of former President Santiago Peña’s investments and financial transactions that were recovered during a raid on Ueno’s brokerage offices.

Author Bio: Veronica Martin is a graduate of the University of Texas at Austin, where she studied Government and History. Her interests focus on Latin American foreign affairs, corruption, and democracy.