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Paraguay bank crisis spurs lawmakers’ calls to impeach president

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By ‌Daniela Desantis

ASUNCION, Nov 4 (Reuters) - Paraguay's political crisis deepened on Wednesday as opposition lawmakers pressed ​ahead with efforts to impeach President Santiago Pena, whom they blame for the crisis triggered by the collapse of digital lender ueno ⁠that left millions of customers unable to access their accounts. 

Thirty-five lawmakers submitted impeachment articles in the 80-seat lower house on Wednesday and asked congressional leaders to convene an extraordinary session on Thursday to debate Pena's future. 

Opposition lawmakers ​accuse Pena of conflicts of interest, misuse of pension funds and institutional cover-ups linked to the handling of the bank's collapse. 

Pena has ‌not publicly addressed the impeachment push and the presidency did not immediately respond to requests for comment. 

In a social media post on Wednesday, the president urged political leaders to prioritize the interests of depositors and said those responsible for ⁠irregularities would face justice "without exceptions." 

Pena, a conservative economist who took office in 2023, was a ⁠shareholder until March last year in Grupo Vazquez, which controls ueno. Ueno is a digital lender that grew quickly from a niche fintech player into a mid-tier bank, now administering close to $850 million in public funds. 

Paraguay's central bank intervened in ueno after determining that it had breached minimum solvency requirements, setting off a crisis that has left the company's roughly ‌3 million customers, in a country of 6.5 million people, unable to access accounts. 

"Never before has anyone harmed ⁠3 million people in a single day in the Republic of Paraguay, and ‌you achieved it, Mr. President," opposition lawmaker Rocío Vallejo told a ​congressional session before presenting the accusation against Pena.

The crisis has become a serious challenge to Pena's administration, undermining Paraguay's hard-won reputation as a stable destination for foreign investment, especially from neighboring Brazil.

The fallout forced the resignation on ‌Tuesday of the central bank chief and resulted in the detention of ​eight ueno executives. Prosecutors issued arrest warrants on ⁠Tuesday and the executives later turned themselves in, while courts ordered their assets frozen as ‌the investigation widened. 

Ueno has made no public statement on the ⁠issue, and it did not immediately respond to a request for comment. 

While Paraguay's opposition remains short of the two-thirds majority needed to advance impeachment proceedings, it has secured the backing of several dissident members of the ruling ​Colorado Party.

Several banking apps experienced outages on ‌Wednesday, adding to concerns about confidence in Paraguay's financial system. The Association of Banks of Paraguay (Asoban) said lenders were ⁠working to absorb a surge of customers shifting their ​accounts from ueno and said the banking system "continues to operate normally." 

(Reporting by Daniela Desantis in Asunción and ​Lucinda Elliott in Montevideo; Editing by Jonathan Spicer )

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