BENEFICIARIES OF CORRUPTION? THE COMPLICIT ROLE OF SOUTH AFRICAN BANKS IN ILLICIT FINANCIAL FLOWS

Abstract

This study examines the role of South African banks in facilitating illicit financial flows (IFFs) linked to corruption, state capture, and corporate misconduct. While financial institutions are formally mandated to detect and prevent money laundering, growing evidence suggests systemic regulatory weaknesses and institutional complicity. The study adopts the Theory of State-Corporate Crime and the Political Economy of Corruption as its guiding theoretical frameworks. The Theory of State-Corporate Crime explains how collaboration between political elites and corporate actors enables large-scale financial wrongdoing, while the Political Economy of Corruption situates illicit financial flows within broader structural inequalities and power asymmetries embedded in capitalist systems. Using qualitative document analysis of judicial commission reports, regulatory findings, and secondary data, the study finds that weak enforcement mechanisms, profit-driven banking practices, and political patronage networks created enabling conditions for financial misconduct. The findings suggest that regulatory reform alone is insufficient without structural transformation of accountability systems. The study contributes to debates on financial governance, institutional complicity, and anti-corruption enforcement in emerging economies.