Pakistan Statutory late-payment interest
Pakistan Statutory late-payment interest: no single figure applies. The reason is set out below, cited to the governing instrument. Last checked against the official source on 10 Aug 2026.
Official source: Interest Act 1839 (Act No. XXXII of 1839) s. 1: the Court · Last checked 2026-08-10 · source fingerprint
Pakistan fixes no statutory interest rate on money debts — interest is discretionary under the Interest Act 1839 and section 34 of the Code of Civil Procedure — and the Constitution now requires riba to be eliminated completely before 1 January 2028.
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| Current value | no single figure |
|---|---|
| In force from | — |
| Official source | Interest Act 1839 (Act No. XXXII of 1839) s. 1: the Court 'may, if it shall think fit, allow interest to the creditor at a rate not exceeding the current rate of interest'; Constitution of Pakistan Art. 38(f) as substituted by the Constitution (Twenty-sixth Amendment) Act 2024: the State shall 'eliminate riba completely before the first day of January, 2028' |
| Last verified | 2026-08-10 |
| Verification | primary — No verification limitation recorded — read from the official source cited. |
| Provenance | source fingerprint |
What this value means
REFUSAL — no Pakistani statute fixes a rate a creditor can claim on an overdue debt, and the legal basis for charging interest at all is under a constitutional sunset. The general instruments give discretion without a number: the Interest Act 1839 lets a court allow interest 'at a rate not exceeding the current rate of interest' — from the due date where the debt is payable at a certain time under a written instrument, otherwise only from the date of a written demand — and section 34 of the Code of Civil Procedure 1908 leaves pre-decree and post-decree interest at such rate as the court deems reasonable. THE CONSTITUTIONAL POSITION IS THE MATERIAL FACT FOR ANY FORWARD-LOOKING USE: the Federal Shariat Court held on 28 April 2022 that riba in all its forms is repugnant to Islam, struck down the interest-bearing provisions of the principal financial statutes, and directed that the interest-based system be replaced; the Constitution (Twenty-sixth Amendment) Act 2024 then hard-wired the timetable by substituting Article 38(f) to require riba to be eliminated completely before 1 January 2028. Statutory references to interest are being repealed or converted to Shariah-compliant equivalents on that timetable, so any Pakistani interest figure carries a known expiry and should not be treated as stable past 2027. THE ONE PUBLISHED FIGURE IS SECTOR-SPECIFIC: under section 3 of the Financial Institutions (Recovery of Finances) Ordinance 2001 a defaulting customer of a financial institution is liable, from the date of default until realisation, for that institution's COST OF FUNDS as certified by the State Bank of Pakistan from time to time, and a Banking Court decree must provide for it. That is a bank-recovery measure available only to financial institutions — an ordinary trade creditor cannot invoke it, and it is not a general legal interest rate. Provincial money-lending laws and the Usurious Loans Act 1918 let courts reopen excessive bargains but set no rate. No civil/commercial split exists in the general law.
Get it programmatically
curl https://asiaref.dev/v1/pk/statutory-interest
# $0.005 per call — x402 on Base (USDC). No key, no signup.
# History: curl https://asiaref.dev/v1/pk/statutory-interest/history?from=2020-01-01
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The same figure elsewhere: Philippines · Qatar · Saudi Arabia · Singapore · South Korea · all 28