Section 46 in The Assam State Co-operative Agriculture and Rural Development Bank Limited
46. The rate of interest on loan.
(a)The rate or interest on loans shall be determined by the Board from time to time. It shall be competent to the Bank to charge a higher rate of interest to be called as penal interest not exceeding one percent over the agreed rate, on arrears of debts due to it as well as to recall the whole or any part of the loan outstanding in each case on default in repayment any instalment or part thereof on debt fixed for payment is made.(b)Recall of Loan for Misapplication. - If a loan granted by the Bank has been applied by the loanees for a purpose other than that for which it was granted, the Bank shall be entitled to recall the whole or any part of the loan outstanding with interest without waiting for the expiry of the period for which the loan was granted. In such a case the loan account shall at once be closed without reference to the term for which the loan was granted and the borrower shall be charged interest at one percent per annum more than the rate of which the loan was issued from the late of closing the loan account to the date of recovery.
