The Islamabad High Court (IHC) has approved a formal recovery and settlement process for borrowers linked to the digital lending app Barwaqt during the liquidation of Seedcred Financial Services Limited.
The decision is being seen as major relief for hundreds of thousands of borrowers. The Securities and Exchange Commission of Pakistan (SECP) played a key role in handling the legal and regulatory process and helping create a system for loan recovery and company liquidation.
Under the court-approved mechanism, the Official Liquidator will begin a structured recovery process for more than 750,000 borrowers. The court also directed the SECP, along with credit bureaus Tasdeeq and DataCheck, to coordinate repayment and credit clearance procedures.
Borrowers will now be able to repay their outstanding loans into a designated liquidation account and later have their default records removed.
The court further instructed the SECP to publish notices in Urdu and English newspapers explaining the repayment process and related procedures.
The decision is expected to benefit thousands of borrowers who were left uncertain after the Barwaqt app stopped operating, making it difficult for users to clear loans or improve their credit records.
The IHC also directed the State Bank of Pakistan (SBP), Federal Investigation Agency (FIA), and Federal Board of Revenue (FBR) to cooperate fully in completing the legal and financial process.
Barwaqt had become one of Pakistan’s major digital lending apps before facing investigations related to anti-money laundering compliance, recovery practices, and customer complaints.
