On August 18th, 2010 a seminar was organized by the State Bank of Pakistan where Karachi Centre for Dispute Resolution (KCDR) was invited to address some 50 participants from various leading banks of Pakistan on the need of mediation in the banking sector of Pakistan. The Director of KCDR, Dr. Zafar Ahmed Khan Sherwani, Ms. Navin Merchant, Project Manager IFC, Ms. Saima Zuberi, Project Officer IFC and Ms. Maliha Azhar, Corporate Secretary KCDR was representing the ADR Project, KCDR.

Dr. Zafar Sherwani opened the session with his presentation followed by a detailed discussion session where the participants were welcomed to put forward their queries and questions on mediation process.

“The pendency in banking courts in Karachi amounts to 3,570 cases and thus it is the responsibility of each bank to avail mediation to negotiate and further settle non-performing loans,” commented Dr. Zafar Ahmed Khan Sherwani, Director, Karachi Centre for Dispute Resolution.

According to Ms. Navin Salim Merchant, ADR Program Manager, IFC “In most of the countries falling in Middle East and North Africa region, complex and costly contract enforcement processes remain a strong disincentive for investors. Overall, entrepreneurs have limited confidence in the judicial system to resolve their disputes. Lengthy court procedures often cost entrepreneurs more than the amounts they are disputing, considering the financial and human resources involved and the opportunity costs of trapped assets in outstanding disputes over many years.”

The SBP is set to promote ADR mechanisms for the banking sector through policy development to further promote the concept of banking mediation in Pakistan.