JOHANNESBURG - The main opposition Democratic Alliance party has called on the South African Reserve Bank (SARB) to investigate allegations that the country's fourth largest bank was operating as a "loan shark".
US researcher Viceroy on Tuesday said it had done extensive due diligence and compiled evidence suggesting Capitec must take significant impairments to its loans which would likely result in a net-liability position.
Viceroy said its research showed that Capitec "is a loan shark with massively understated defaults masquerading as a community microfinance provider" and said the South African Reserve Bank and the Minister of Finance should immediately place the bank into curatorship.
Also read: Viceroy has more dirt on Capitec
"The allegations made by Viceroy Research, which Capitec Bank have dismissed as factually incorrect, are serious and should be investigated by the SARB," DA spokesman on finance David Maynier said.
"We have to be absolutely certain that there is no risk to depositors and that the banking system is safe and sound in South Africa."
Have you read: #Capitec responds to Viceroy's 'loan shark' report
Capitec chief executive Gerrie Fourie on Tuesday dismissed the Viceroy report as "factually completely incorrect" and one-sided.
The central bank said it was satisfied, on the information currently available to it, that Capitec is well capitalized, has adequate liquidity and meets all prudential requirements.
Capitec CEO Gerrie Fourie
Shares in Capitec tumbled as much as 20 percent on Tuesday after the report was released, but rebounded by close of trading. Analysts have also criticised Viceroy for not giving Capitec the opportunity to respond and present its case while doing its research.