Paraguay President Santiago Peña announced on Thursday that he was resigning from office after a political and financial crisis that collapsed the country’s banking system.

But the state’s Congress has rejected his resignation and is pressing ahead with impeachment proceedings.

Al Jazeera reported that the lower house voted 78-0 to impeach Mr Peña. The Senate also opened impeachment proceedings and summoned him to appear on Friday.

Mr Peña announced his resignation in a video address shared on X on Thursday.

He said, “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.”

The president said he resigned to protect stability, social peace, and democratic institutions.

A joint congressional session was called to consider the resignation, and the votes failed, according to Al Jazeera.

As a result, he remains president and will face impeachment proceedings.

Paraguay’s financial crisis erupted after Ueno Bank entered an insolvency process, which froze all operations. Ueno Bank is the country’s largest lender. It claims to serve about 60 per cent of the population.

Founded in the 1970s, Ueno Bank grew from an obscure finance company into a major institution after Grupo Vázquez, one of Paraguay’s largest business and industrial conglomerates, purchased it in 2021.

Mr Peña was a shareholder in Grupo Vázquez until last year.

Last Monday, the central bank ordered Ueno into resolution over insolvency, freezing the deposits of 3 million customers.

It held pensions and some other public funds, and collapsed earlier this week. Thousands of citizens could not access money for food and basic daily expenses.

Bank executives were arrested, and people took to the streets in massive protests.

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Lawmakers and opposition groups have accused Mr Peña of misconduct, but he has vehemently rejected these allegations.

Had his resignation been accepted, he would have become a senator for life and enjoyed a degree of legal immunity from prosecution, as members of the legislature do. This is entitled to the Paraguayan president after leaving office.

However, this benefit does not apply to a president who is convicted in an impeachment trial.

But Mr Peña has said he would appear for Senate impeachment proceedings to exercise his “right to a defence”.

On X, he wrote, “I will provide the information requested of me. Citizens deserve to know the truth, without cover-ups and without anyone being above the law.”

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