Paraguay Impeachment Trial Opens as Congress Rejects Pena Resignation Over Ueno Bank Collapse

Paraguay President Santiago Pena will face an impeachment trial after Congress refused to accept his resignation over the collapse of Ueno Bank. The Chamber of Deputies voted 78-0 to impeach Pena, and the Senate opened a trial on Friday, November 6, 2026. Pena was summoned to defend himself, with a hearing due to begin at 10 a.m. local time, which is 13:00 GMT. Removal from office would require 30 of the 45 Senate votes, or two-thirds of the chamber. If Pena is removed, Vice President Pedro Alliana, 52, would serve as president until August 2028.

The decision came one day after Pena offered to resign through a post on X, after prosecutors announced that he was under criminal investigation linked to the bank collapse. Congress declined the resignation and moved to impeachment instead. Pena denies wrongdoing and has said he will appear before the Senate and exercise his right to a defence.

Quick Facts

How the Resignation Was Rejected and the Trial Opened

Pena offered his resignation on Thursday, November 5, 2026, in a post on X, after prosecutors announced that he was under criminal investigation over the collapse of Ueno Bank. Both houses of Congress declined to accept it, and the process moved quickly toward impeachment instead.

The Chamber of Deputies voted 78-0 to impeach Pena, showing how little support remained for a quiet exit. The Senate then opened an impeachment trial on Friday, November 6, 2026. Pena was summoned to defend himself, and the hearing was due to begin at 10 a.m. local time, which is 13:00 GMT. The Senate has not announced a date for a final vote.

The choice between resignation and impeachment matters for legal reasons as well as political ones. Opposition senators argue that letting Pena resign would preserve his eligibility to become a senator for life, with legal protections that could prevent prosecution. Impeachment would remove him through a formal process without that protection. The full background is set out in our earlier report on Santiago Pena resigning over the Ueno Bank collapse, which covers the events that led to this trial.

What Happened at Ueno Bank

Ueno Bank was a digital lender with about 2.94 to 3 million customers. The bank was a normal part of daily life for many customers, used for savings and payments. That changed when the central bank suspended operations on Monday, locking customers out of their deposits.

The figures at the centre of the case are large. About 800 million dollars in public deposits were involved, including around 380 million dollars from Paraguay state pension and health fund. That matters because the money was not only private savings. It included funds linked to pensions and health care, which many people depend on.

Regulators found serious problems in the way the bank was run. Capital adequacy had fallen to less than half the required legal minimum. In simple terms, the bank did not hold enough capital to cover the risks it had taken. A review also found poorly documented loans and expenses counted as assets, which pointed to weak supervision and poor controls, not a single bad loan.

The central bank began deposit guarantee payments on Friday to a first group of customers, with up to 10 million guaranies, about 1,565 dollars, each. For customers with small balances, it may cover most of what they saved. For larger balances, it will cover only part. The payments are a first step, not a full solution.

The Criminal Investigations and the Charges

Attorney General Emiliano Rolon Fernandez opened three criminal investigations on November 5 into the supervision of Ueno, public funds, and official conduct. The investigations include allegations involving Pena and other current and former officials. The three tracks cover how the bank was supervised, public money, and the conduct of officials.

Prosecutors have charged 27 people linked to Ueno. A judge ordered six executives into pretrial detention, including founder Miguel Vazquez and bank president Juan Manuel Gustale. Two others were placed under house arrest. Pretrial detention does not mean a person has been found guilty. It means a judge has decided that the person should be held while the case moves forward.

Why Pena Faces Questions About Conflicts of Interest

Lawmakers have accused Pena of conflicts of interest over his past shareholding in Grupo Vazquez, the owner of Ueno until March 2025. Critics say that link creates a conflict because a president with a past financial tie to a bank group could be seen as too close to the business he is expected to oversee. Pena denies wrongdoing.

A conflict of interest claim is not a finding of guilt. It is a claim that a person had interests that could have affected judgment, or looked as if they did. In public office, the appearance of a conflict can matter almost as much as a proven conflict, because trust depends on leaders being seen as acting for the public. That is one reason the claim has carried weight in Congress.

The role of former President Horacio Cartes adds another layer. Cartes leads the governing Colorado Party and mentored Pena, so his endorsement of impeachment was a major political signal. It showed that Pena had lost support at the top of his own party, not only among opposition lawmakers. That loss can change the count in the Senate, though 30 votes are still needed for removal. Pena was welcomed in Washington weeks ago as a key ally of the Trump administration, but foreign support does not protect a president from Congress or prosecutors at home.

What Happens Next in the Senate

The Senate trial is now the centre of the story. Pena has been summoned to defend himself, and the hearing was due to begin at 10 a.m. local time, which is 13:00 GMT. The Senate will hear the case and the defence, then decide whether to remove him. Removal requires 30 of the 45 Senate votes, or two-thirds of the chamber. That is a high bar, and Pena would need to lose support from a large share of senators, including some from his own side.

No date for a final vote has been announced. That leaves the country in a period of uncertainty. Either way, the government must keep working while the trial continues, and the central bank and prosecutors must keep their work separate from the political process, so the trial is seen as fair.

If Pena is removed, Vice President Pedro Alliana, 52, would serve until August 2028. If Pena survives the trial, he would remain president, but he would still face the criminal investigations and the political damage from the bank collapse. Survival in the Senate would not end the legal questions or restore public trust on its own.

Why This Matters Beyond Paraguay

The Ueno Bank collapse is a local crisis with wider lessons. A digital bank with about 3 million customers can grow fast, but growth without strong controls creates risk. When capital falls below the legal minimum and loans are poorly documented, the warning signs may be clear to regulators long before the public sees them. The question is whether those signs were seen, whether action was taken in time, and who is responsible. The answers will matter for other countries with fast growing digital banks.

The case also shows how quickly a financial failure can become a political crisis. Within days, a bank suspension led to criminal charges, a resignation offer, a unanimous impeachment vote in the lower house, and a Senate trial. When millions of people cannot reach their savings, and public pension and health money is involved, the political cost is high.

Institutions are also being tested. Congress, the Senate, the central bank, the attorney general, and the courts each have a separate role. If each body does its work fairly and openly, the process can rebuild trust even if the outcome is painful. Similar tests appear in other stories this week, including our report on a judge blocking a construction project for 14 days, and a senior military change covered in our report on Muhoozi Kainerugaba stepping down as Uganda military chief. Each turns on whether rules are followed when power changes hands.

What is the Paraguay impeachment trial about?

The trial is about whether President Santiago Pena should be removed from office over the collapse of Ueno Bank. Congress rejected his resignation offer, the Chamber of Deputies voted 78-0 to impeach him, and the Senate opened a trial on November 6, 2026.

How many Senate votes are needed to remove Pena?

Removal requires 30 of the 45 Senate votes, which is two-thirds of the chamber. If Pena is removed, Vice President Pedro Alliana, 52, would serve until August 2028.

What happened to Ueno Bank customers?

Ueno Bank had about 2.94 to 3 million customers. The central bank suspended operations on Monday, locking customers out of their deposits. About 800 million dollars in public deposits were involved, and guarantee payments of up to 10 million guaranies, about 1,565 dollars, each began on Friday for a first group.

Who has been charged in the Ueno Bank case?

Prosecutors have charged 27 people linked to Ueno. A judge ordered six executives into pretrial detention, including founder Miguel Vazquez and bank president Juan Manuel Gustale. Two others are under house arrest. Attorney General Emiliano Rolon Fernandez opened three criminal investigations on November 5, including allegations involving Pena and other officials.

Sources

Business Mirror: Paraguay President Pena Under Investigation Faces Removal From Office Over Bank Collapse

US News Pulse: Paraguay Impeachment Trial Opens as Congress Refuses Pena Resignation in Ueno Bank Crisis

El7: Paraguay Central Bank Liquidates Ueno Bank Amid Protests and Solvency Crisis

Final Thoughts

Paraguay now faces a test that will shape its politics for years. The Senate must decide whether to remove the president, while millions of bank customers wait for their money and prosecutors build criminal cases. The trial will not answer every question, but it will set the direction for what comes next. If the process is fair, open, and based on evidence, Paraguay can begin to rebuild trust.

Featured image: AI-generated editorial illustration.