The statutory rate is three times the RBI bank rate, compounded monthly. The bank rate moves with the repo rate (it has been set at repo + 0.25%): for example, a bank rate of 6.75% means 20.25% a year on the delayed amount. Use the MSME interest calculator to compute your claim.
Worked example
Suppose ₹10,00,000 is accepted on 1 January with no written credit period, so it falls due on 16 January (15 days). If the bank rate is 6.75%, the statutory rate is 20.25% a year, or 1.6875% a month compounded. After 12 months of delay the interest is roughly ₹2,22,000 (₹10,00,000 × (1.016875^12 − 1)), so the claim is about ₹12,22,000 before costs. The exact figure depends on the bank rate in force during each month of delay.
The bank rate is published by the RBI with each monetary policy statement. Always compute with the rate(s) applicable during the delay period; the calculator lets you enter the rate.
How FundRaksha claims it
The legal notice computes the interest to date and states that it continues to accrue daily. Most buyers settle the principal quickly once the interest figure is in writing. Where the matter goes to the Facilitation Council, the award includes interest at the statutory rate. The free consultation includes a computation for your invoices; our fee is 30% only on what is recovered.
Non-MSME suppliers
Medium enterprises, traders and unregistered suppliers cannot claim the Section 16 rate. They claim interest under the contract, under Section 34 CPC / the Interest Act, 1978 at a rate the court finds reasonable (commercial rates are usually allowed), or under the arbitration clause. See the late payment interest calculator.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.