The Role of Alternative Dispute Resolution (ADR) in Resolving Commercial Banking Disputes: A Case Study of Pakistan
Keywords:
Alternative Dispute Resolution, Commercial Banking, Banking Disputes, Pakistan, Banking Ombudsman, Mediation, Arbitration, Litigation, Financial Services, Dispute Resolution EffectivenessAbstract
This study examines the effectiveness of Alternative Dispute Resolution (ADR) in resolving commercial banking disputes in Pakistan through a comprehensive mixed-methods analysis. The research evaluates current dispute resolution mechanisms, including the Banking Ombudsman, internal bank procedures, arbitration, and traditional litigation, using data from 2,847 banking disputes resolved between 2019-2023. Findings reveal that ADR mechanisms significantly outperform traditional litigation across key metrics: average resolution time (89 days vs. 1,247 days), cost effectiveness (3.2% vs. 23.7% of disputed amounts), and customer satisfaction (91% vs. 58%). Despite these advantages, systemic challenges including limited institutional capacity, regulatory gaps, and cultural barriers impede widespread ADR adoption. The study proposes comprehensive reforms including legislative enhancement, capacity building, and stakeholder engagement strategies to establish Pakistan as a regional leader in banking dispute resolution.