KARACHI: Mian Zahid Hussain, President of the Pakistan Businessmen and Intellectuals Forum, has endorsed the Law and Justice Commission of Pakistan’s focus on Alternative Dispute Resolution (ADR) to address the growing issue of banking defaults.
According to Pakistan Businessmen and Intellectuals Forum, Hussain, along with FPCCI President Atif Ikram Sheikh, voiced their support at a recent meeting of the Law and Justice Commission in Islamabad. The judicial system is facing a daunting backlog of over 2.37 million pending cases, with banking tribunals and civil courts managing around 30,000 recovery suits related to non-performing loans. These financial disputes have stalled significant capital, impacting liquidity and hindering economic growth in Pakistan. The meeting, chaired by the Chief Justice of Pakistan, included key stakeholders from various sectors.
Hussain emphasized that traditional litigation often prolongs dispute resolution in banking defaults, leading to depreciated asset values and increased legal costs. He noted that unresolved non-performing loans pose a challenge to private sector credit, especially for SMEs. By adopting ADR methods like commercial mediation, the backlog could be alleviated, returning capital to the economy.
The business community, as represented by the FPCCI, supports the integration of ADR into financial regulations. At the meeting, Sheikh suggested establishing mediation centers for corporate and banking disputes. This initiative would reduce the judicial burden and protect businesses from the negative impacts of public litigation. Out-of-court settlements offer flexibility in restructuring and debt rescheduling, helping preserve jobs and industrial operations.
Hussain concluded by urging the State Bank of Pakistan and the Ministry of Finance to implement the policy recommendations quickly. He stressed the need for a mandatory ADR protocol in banking recovery suits to enhance business ease, attract investment, and ensure the banking sector supports national prosperity.
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