Calculate the compound interest a registered micro/small supplier can claim on an overdue invoice under Section 16 of the MSMED Act — three times the RBI bank rate.
Frequently asked
Who can claim MSMED interest?
Any supplier registered as a micro or small enterprise under Udyam (MSME). Registration is free and online. The buyer must pay within 45 days or interest accrues automatically.
How much interest can I claim?
Three times the RBI notified bank rate, compounded monthly, from the day payment became due. On a 6.5% bank rate that’s ~19.5% a year — a real deterrent to late payment.
Do I have to go to court?
You can, but even citing the entitlement in a reminder often works. Disputes go to the MSME Samadhaan portal / a Facilitation Council, not straight to court.
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