• ACTis has raised six flags for the IDFC.
• Many signs suggest a system of state capture may be operating at IDFC, which has significant access to capital.
• The abuse of the bank’s loan-making business is enabled by weak financial controls and protected by those entrusted with oversight, many of whom may be benefiting. A similar pattern has unfolded at IDFC’s subsidiary, Ithala Bank.
• IDFC’s failure to properly oversee Ithala Bank has harmed its clients, including 257 000 depositors and 76 000 South African Social Security Agency (SASSA) grant recipients who have struggled to access their funds.
• The South African Reserve Bank’s (SARB) continued involvement at Ithala Bank, together with Special Investigating Unit (SIU) investigations, may reveal more about systemic abuse at the IDFC, including who may be driving it.
• If state capture has been present at the IDFC and its subsidiary for some time, it will be difficult to reverse without significant and urgent reform.