(1)The Government may, from time to time, by a notification in the Official Gazette, fix the maximum rate of interest for any local area or class of business of money-lending in respect of secure and un-secured loans and until such rates are fixed, the maximum interest charged shall not exceed 24% per annum.(2)No money-lender shall receive from a debtor or intending debtor any sum by way of compound interest on a loan advanced or intended to be advanced or any sum by way of interest at a rate higher than the rate fixed under sub-section (1) for any default committed by the debtor in payment of the sums on due date in accordance with the terms on which the loan is granted:Provided that the money-lender, in case of such default, may charge simple interest at a rate not exceeding the rate payable in respect of the principal on the sums due in respect of the period commencing on the date on which they become due for payment and ending on the date on which they are actually paid.(3)Notwithstanding anything contained in any law for the time being in force, no agreement between a money-lender and a debtor for payment of interest at the rates exceeding the maximum rates fixed by the Government under sub-section (1) and no agreement in contravention of the provisions of sub-section (12) shall be valid.(4)If any money-lender or a person advancing a loan specified in sub-clause XIII of clause (k) of section 2 makes an oral or written demand or charges or receives from a debtor interest at rate exceeding the maximum rate fixed by the Government under sub-section (1), he shall, for the purposes of section 43, be deemed to have contravened the provisions of this Act.
