Interest payable on compulsory loan
256 Interest payable on compulsory loan
The rate of interest payable by a co‑operative on a loan under section 255 during a period is —
in the case of a co‑operative with share capital —
the rate (or if there is more than one rate, the higher or highest rate) of dividend payable for the period on the share capital of the co‑operative; or
if the rate of dividend payable for the period has not been determined, the rate (or the higher or highest rate) of dividend payable for the immediately preceding period for which a rate has been determined; or
if a rate of dividend has never been determined for the share capital of the co‑operative, the rate that the board of the co‑operative considers reasonable;
or
in the case of a co‑operative without share capital, the rate that the board of the co‑operative considers reasonable; or
if the rules provide for a rate to be payable that is higher than the rate applicable under paragraph (a) or (b), that higher rate.
A member may agree to the rate of interest being less than the rate that would otherwise be payable under this section and may agree to no interest being paid.
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