Asunción (Paraguay) (AFP) - Former Paraguayan president Santiago Peña was remanded in preventive detention this Saturday, after being charged for his alleged responsibility in a banking crisis that left millions of savers without access to their deposits and precipitated his dismissal, Judge Humberto Otazú informed journalists.

First modification: 11/08/2026 - 02:15

Peña was charged this Saturday with alleged breach of trust and administration for personal gain.

The Paraguayan Prosecutor's Office accuses the former president of having used his influence to favor Ueno Bank, a digital bank that was barely three years old, since he had up to 2,025 shares in the group that controlled the institution.

At the end of the hearing, the judge reported that Peña will serve preventive detention in the Presidential Escort Regiment in Asunción, where he was already detained on Friday night, transferred from his home after it was surrounded by protesters.

"We want to see the person responsible for this misfortune imprisoned. Jail for Peña!" Macarena Chilavert, a 33-year-old lawyer, told AFP near the Prosecutor's Office while Peña testified.

Leila Cosini, a 28-year-old student who was near the court headquarters, said she was anxious and worried about the future of her deposits: "I lost my money. I was putting it there precisely because it was easy to open an account," she said.

Peña, 47, is accused of fattening the bank with millions in public funds, and of hiding or minimizing his financial problems despite being alerted to irregular loans and risks of insolvency.

They also accuse him of having appointed Carlos Carvallo, former director of Ueno Bank, as head of the Paraguayan Central Bank, which raises suspicions of a potential conflict of interest.

After an investigation that lasted more than three hours, the Prosecutor's Office requested preventive detention and the inhibition of assets for Peña and Carvallo, the latter accused of the same charges as the former president in addition to the crime of producing false public documents.

Judge Otazú granted the prosecutor's requests. Regarding Peña, he said "he must be under the figure of preventive detention to guarantee his submission" to the judicial procedure and to avoid the risk of escape. He also noted that the former president "refrained from testifying" during the hearing.

Peña's lawyer, Ricardo Preda, rejected the accusations and told reporters that "the president is not the one who directly tells a minister which bank to make a deposit to."

No access to deposits

The crisis broke out on November 3, when the Central Bank of Paraguay intervened in Ueno Bank due to solvency problems and left millions of clients without access to their deposits.

The entity managed more than 800 million dollars in public funds, according to the Prosecutor's Office based on estimates from the Ministry of Economy.

The Ueno Bank crisis directly affects almost three million accounts ranging from pensioners, public and private companies and even the South American Football Confederation (Conmebol) itself.

The bank's intervention caused strong protests in the streets that were repelled by the police with water cannons and tear gas.

Peña, of the Colorado Party (conservative), was arrested on Friday at his residence in Asunción less than an hour after being removed in an accelerated impeachment trial in the Senate.

The legislators had not accepted his resignation, which would have assured him privileges by becoming a senator for life.

In parallel, Pedro Alliana, who was Peña's vice president, took office on Friday as president, with attention focused on his government's response to the banking collapse.

"Financial disaster"

Upon taking office, Alliana promised that those affected by the "financial disaster" will be compensated and ordered priority for lower-income savers.

Alliana, 52, must complete the presidential term until August 2028.

The president reported on Saturday that payments have already been made to 1,196,000 accounts for an amount equivalent to about 160 million dollars.

"We also guarantee the payment of salaries and bonuses to all retirees of the IPS (social security institute)," he reported in X.

The Central Bank released a list of banking entities that will be open during the weekend and stated that deposits have already been returned to "more than 50%" of the affected savers.

"I was distressed, I can't deny," Antonio Ruiz Sánchez, a 58-year-old electrical technician, who recovered his savings on Thursday, told AFP: "Deep down I was confident that the problem was only with that bank and that it would be solved," he added.

The presidential impeachment has precedents in Paraguay. In 2012, the Senate removed leftist President Fernando Lugo for "poor performance of his duties."

© 2026 AFP

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