The Islamabad High Court (IHC) has paved the way for relief for hundreds of thousands of borrowers linked to the digital lending app “Barwaqt” by allowing a formal recovery and settlement mechanism during the winding up of Seedcred Financial Services Limited.
The development is a big win for the sector as the Securities and Exchange Commission of Pakistan (SECP) actively pursued the case, facilitated regulatory and legal proceedings, and helped devise a workable mechanism for the winding up of the company and the repayment of outstanding loans.
The court has authorized the Official Liquidator to initiate a structured recovery process for more than 750,000 borrowers and directed the SECP, along with credit bureaus “Tasdeeq” and “DataCheck,” to coordinate repayment procedures and credit clearance arrangements.
Under the mechanism, borrowers will be able to repay their outstanding amounts into a designated liquidation account and subsequently have their default records cleared.
The court also directed the SECP to publish public notices in Urdu and English newspapers to inform borrowers about the repayment process and related procedures.
The development is expected to provide long-awaited relief to thousands of individuals who had been facing uncertainty after the Barwaqt app became non-operational, leaving borrowers unable to settle their liabilities or regularize their credit status.
The Islamabad High Court further directed the State Bank of Pakistan (SBP), Federal Investigation Agency (FIA), and Federal Board of Revenue (FBR) to fully cooperate with the liquidation process to ensure the completion of all legal, financial, and regulatory proceedings.
Barwaqt had emerged as one of Pakistan’s major digital lending platforms but later faced scrutiny over alleged AML/CFT compliance violations, aggressive recovery practices, and related complaints.
Barwaqt loan repayment plan