Paraguay: Paraguay has plunged into a major political crisis after the Senate removed President Santiago Peña from office amid allegations of financial misconduct linked to the collapse of Banco Ueno. Vice President Pedro Alliana was sworn in as the country's new president on Friday, while authorities ordered Peña to be placed under house arrest.

All 44 senators present voted in favour of Peña's removal, accusing him of wrongdoing during his tenure. Peña had offered to resign on Thursday, but Congress rejected the proposal, with opposition lawmakers arguing that accepting his resignation would allow him to escape accountability.

His lawyers, Ricardo Preda and Adolfo Ferreiro, have challenged the decision. Peña denied the allegations and said in his farewell message that he did not want his departure to trigger further controversy or instability.

Banco Ueno Collapse Sparks Political Storm

The crisis erupted after financial authorities took control of Banco Ueno on Tuesday. The bank, Paraguay's fifth-largest by deposits, reportedly received more than $800 million in government funds, including approximately $355 million deposited by a public pension fund beyond the legally permitted limit.

The bank's collapse left millions of customers struggling to access their savings, withdraw cash or make card payments. Refunds of deposits up to 10 million guaraníes, approximately $1,600, began on Thursday. Paraguay's central bank has said deposits of around $37,000 are covered by insurance.

Political Fallout and Mass Protests

The banking scandal has triggered widespread protests, with thousands of depositors demanding access to their money. Police reportedly used rubber bullets and pepper spray to disperse demonstrators.

A teachers' union representing more than 40,000 members has announced an indefinite nationwide strike from Monday, demanding protection for funds deposited in the public pension system.

The investigation has resulted in charges against 27 people, including Banco Ueno's major shareholder Miguel Vázquez. Six bank directors have been detained, while authorities have seized nine luxury cars, a yacht and a small aircraft.

Investigators are also examining the roles of Peña, newly sworn-in President Alliana and central bank officials.

Power Struggle Within Paraguay's Ruling Party

The political crisis has also exposed a growing rift between Peña and former President Horacio Cartes, who had supported Peña's rise to power.

Their relationship reportedly deteriorated after Peña developed his own political and business network. Cartes-backed lawmakers raised questions about the bank's loans and suspicious transactions in September. Following the bank's collapse, Cartes supported Peña's removal, leaving the former president increasingly isolated within his own party.

Several senior officials, including the interior minister and chief of staff, also resigned on Friday.

Peña's removal has stripped him of lifetime Senate membership and legal immunity normally granted to former presidents.

The unfolding crisis has pushed Paraguay into its most serious political turmoil in more than a decade, with growing public anger over financial accountability, government oversight and the security of citizens' savings.