Ueno Bank scandal plunges Paraguay into political crisis

The Ueno Bank scandal has plunged Paraguay into a significant political crisis. The suspected banking irregularities, involving hundreds of millions of dollars in public funds, and business ties between the bank and President Santiago Pena, have triggered resolution procedures initiated by the Paraguayan central bank (BCP) on November 3.

This came after determining Ueno had breached minimum solvency requirements. The public prosecutor has announced three investigations into suspected financial crimes, already charging 27 individuals. Despite President Pena's resignation on November 5, which the Congress did not accept, impeachment proceedings have been opened in the Senate.

Ueno Bank, a digital bank belonging to the Grupo Vazquez conglomerate, faced abrupt suspension of operations on November 3, leaving millions of customers unable to access their accounts. The crisis primarily revolves around three potential issues: excessive loans to affiliated companies, concealment of the bank's financial situation, and the Central Bank's delayed intervention.

Ueno Bank, which held substantial public funds, including 800-850 million US dollars at the Instituto de Prevision Social, has raised concerns about the concentration of public funds in a single financial institution. President Pena's business relationship with the Grupo Vazquez, with whom he maintained connections until March 2025, is also under scrutiny.

The public prosecutor's office charged 27 people, including Ueno Bank executives and individuals linked to affiliated companies, for suspected breaches of trust, attempted fraud, breach of duty during crisis situations, and violation of legal obligations. A judge remanded several former bank executives in custody, while the Central Bank initiated winding-up proceedings against Ueno Bank.