Paraguay's President Santiago Peña has been impeached and placed under house arrest following the collapse of Ueno Bank, a crisis that has left more than half of the country's population unable to access their savings.

Peña was arrested on Friday, minutes after lawmakers — including members of his own party — unanimously voted to remove him from office. The vote came days after the digital bank was seized by Paraguay's central bank earlier in the week.

The impeachment passed with 44 out of 45 senators voting in favour. One lawmaker was absent.

Peña had offered to resign on Thursday. Rather than accept his resignation, senators impeached him and charged him with misconduct, stripping him of the immunity typically granted to former presidents.

The charges alleged he had conflicts of interest, manipulated regulatory oversight, diverted pension funds, and participated in an institutional cover-up involving the central bank. Senate president Basilio Núñez said Peña was found guilty of "dereliction of duty."

Peña, who until last year held shares in the company that owned the bank, denied any wrongdoing. In a video posted on social media announcing his resignation, he said: "It was never my intention to betray the trust you placed in me," adding that his priority was "the peace of mind of Paraguayans who entrusted their savings to our financial system."

He is due to be questioned on Saturday over allegations of breach of trust, influence peddling, and misappropriation of funds, according to prosecutor Silvia Margarita Gonzalez Vester.

An estimated three million depositors remain unable to access their savings and pensions, prompting widespread public outrage, particularly in the capital, Asunción.

Long lines of people attempting to withdraw money from Ueno Bank branches stretched down streets in Asunción on Tuesday and Wednesday. Protests erupted across the country on Thursday, with thousands taking to the streets to demand access to their funds. Earlier demonstrations saw clashes with police, who used tear gas and water cannons on crowds.

Peña's deputy, Pedro Alliana, has been sworn in as interim president and pledged not to abandon those affected by the crisis.

"Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated," Alliana said. He will serve as president until 2028.