Paraguay's President Santiago Pena resigns amid banking scandal

Paraguayan President Santiago Peña on Thursday announced his resignation after the takeover of a bank linked to him blocked millions of people from accessing their money.

"I want to apologise to the people if at any point I failed. It was never my intention to betray the trust you placed in me," he said in a video posted on X, one day after opposition lawmakers requested his impeachment.

Protests have rippled across the South American nation after the takeover of Ueno Bank a day earlier left millions of depositors, including pensioners, without access to their money.

Right-winger Peña owned shares in a group that controlled Ueno Bank, but he sold them last year.

On Wednesday, the opposition presented a motion to remove Peña from office over the Central Bank's seizure of the firm. The request for his dismissal for alleged misconduct and conflict of interest received 35 signatures among opposition lawmakers, said dissident ruling party lawmaker Mauricio Espinola.

Congress was due to hold a session on the motion Thursday morning, he said.

Long lines of people trying to withdraw their money from Ueno branches snaked down Asunción's streets on Tuesday and then again Wednesday.

Distraught depositors joined protests around the capital on both evenings.

"I lost my entire life savings," a tearful Marcelino Vergara, 68, said at a demonstration. "They should all go to jail," Vergara said.

Peña had attempted to reassure depositors and placate rising anger among Paraguayans over the ordeal.

"The financial system is sound. It has institutions and protective mechanisms in place," the president said in a video posted to X on Wednesday. 

He also enacted a law that "will allow savers to withdraw, in the shortest possible time, part of the guarantee funds so that the money returns to the hands of those to whom it belongs." 

At Peña's request Tuesday, Central Bank president Carlos Carvallo, who previously chaired Ueno, stepped down.

Arrest warrants were issued for eight of Ueno's top executives.

Ueno says it has over three million customers – nearly half of Paraguay's population – and manages millions of dollars in pensions and other state funds.

The Central Bank said it took over Ueno due to a severe capital shortfall, in order to "protect depositors and preserve the stability of the financial system."

Authorities have suspended its services while they organise the return of deposits.

The law enacted by Peña stipulates that payments will occur within five days.

– TIMES/AFP