XYZ Limited given loan to ABC Limited of Rs. 50000 at interest rate 21 % .These companies are not related to each other.During the statutory audit of XYZ limited auditors raised the query. What are the provisions of law applicable ?
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Maximum rate of interest
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The interest rate is decided by mutual agreement between two comapny, the rate of interest can be anything, but if it is 21 % , it is high compared to othe market options, due to such a huge differnce the auditor had raise this query, you should show him the relevent documents of loan.
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