At what rate shall we book interest for the year ended 31st March 2015 on unsecured loans? Can it be booked @ 9% p.a. keeping in mind that it cannot be less than prevailing bank rate as per the new companies act 2013.
shree (service) (44 Points)
31 March 2015At what rate shall we book interest for the year ended 31st March 2015 on unsecured loans? Can it be booked @ 9% p.a. keeping in mind that it cannot be less than prevailing bank rate as per the new companies act 2013.
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 02 April 2015
Rate of interest will depend upon the terms agreed at the time of taking loan. CA 1956 provided for bank rate in respect of loans to body corporates. However, CA 2013 does not refer to Bank rate. Sec.186(7) reads as under:
"No loan shall be given under this section at a rate of interest lower than the prevailing yield of one year, three year, five year or ten year Government security closest to the tenor of the loan."
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