The Islamabad High Court (IHC) has approved a structured recovery and settlement mechanism for borrowers linked to the digital lending app “Barwaqt,” as part of the winding up process of Seedcred Financial Services Limited.

The decision is expected to provide relief to more than 750,000 borrowers by enabling a formal process for loan repayments and credit record clearance.

The court authorized the Official Liquidator to begin a regulated recovery process and directed the Securities and Exchange Commission of Pakistan (SECP) to coordinate with credit bureaus “Tasdeeq” and “DataCheck” for repayment tracking and credit update procedures.

Under the mechanism, borrowers will deposit outstanding dues into a designated liquidation account, after which their default records will be updated or cleared in line with verified payments.

The SECP has also been instructed to issue public notices in Urdu and English newspapers to ensure borrowers are informed about repayment procedures and timelines.

The court further directed the State Bank of Pakistan (SBP), Federal Investigation Agency (FIA), and Federal Board of Revenue (FBR) to assist in the liquidation and regulatory process to ensure smooth implementation.

Barwaqt, once a major digital lending platform in Pakistan, later came under scrutiny over alleged AML/CFT compliance issues, aggressive recovery practices, and related consumer complaints.