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Cabinet Approves Law Amendments on Statutory Interest Rate

The Cabinet on 9 March 2021 approved draft amendments to the Civil and Commercial Code on interest rates, following a proposal by the Office of the Council of State.

The proposal seeks to amend Section 7 of the Civil and Commercial Code, which states that whenever interest is to be paid, and the rate is not fixed by a juristic act or by an express provision in the law, it shall be 7.5 percent a year.

In the draft amendments, the statutory interest rate will be cut from 7.5 percent to 3 percent a year to suit the present economic conditions.

The proposal also seeks to amend Section 224 by cutting the interest rate for defaults from 7.5 percent to 5 percent a year.

The Office of the Council of State had listened to the views of all relevant sectors in drafting the law amendments on this issue. When the National Assembly reconvenes for a new session, the Government will submit the draft law amendments to Parliament for consideration.

The Civil and Commercial Code has been in use for more than 95 years now, and it needs improvements in line with the economic situation and in order to ensure social fairness and the country’s economic stability.

It is expected the law amendments will come into effect this year.

Source: The Government Public Relations Department

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