WATCH: Capitec responds to Viceroy Research allegations

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Customers queue to draw money from an ATM outside a branch of South Africa's Capitec Bank in Johannesburg,South Africa, March 2, 2017.

Customers queue to draw money from an ATM outside a branch of South Africa's Capitec Bank in Johannesburg,South Africa, March 2, 2017.

WEB_PHOTO_CAPITEC_BANK_RECORDED_ 300118

Customers queue to draw money from an ATM outside a branch of South Africa's Capitec Bank in Johannesburg,South Africa, March 2, 2017.

Customers queue to draw money from an ATM outside a branch of South Africa's Capitec Bank in Johannesburg,South Africa, March 2, 2017.

JOHANNESBURG - Capitec bank is giving a detailed reponse to allegations that it is a "loan shark with massively understated defaults masquerading as a community microfinance provider".

The allegations were made by Viceroy Research, a US-based fund manager that identified failings in the financial management of the Steinhoff group.

In a report, the Viceroy Research said it believes that Capitec is "approving loans to delinquent customers" in order to facilitate them in repaying existing loans, and "engaging in reckless lending practices".

READ: Capitec clinches top banking spot

Capitec has since released a statement saying it had not been approached by Viceroy for insight into its business or to discuss, test or verify the allegations with the bank&39;s management.

"We believe our corporate governance is strong and our communications and disclosures are, and always have been transparent, clear and to the point. On the face of it, the report is filled with factual errors, material omissions in respect of legal proceedings against Capitec and opinions that are not supported by accurate information."