Many clients (and not a few professionals) still believe that anatocism (interest compounding) is a closed chapter. In reality, current legislation has simply transformed a suffered automatic mechanism into a contractual choice.
1. The Current Regulatory Framework (2026)
Here is the current state of the art to correctly orient oneself between regulations and banking practices.
2. Secondary Legislation: CICR Resolution
CICR Resolution No. 343 of August 3, 2016, issued in implementation of Art. 120, paragraph 2, of the Italian Banking Act (TUB), replaced the famous old CICR resolution of February 9, 2000, introducing the technical-operative methods for interest calculation.
The Transitional Regime
With the entry into force of the CICR Resolution of August 3, 2016 (effective October 1, 2016), the transitional regime provided for by Art. 161, paragraph 5, TUB has ceased for what concerns anatocism. The old 2000 discipline (which allowed quarterly compounding if reciprocal) is definitively superseded for new relationships and for those that have been adapted.
3. The Current Situation of Anatocism
The core principle currently in force is the prohibition of automatic anatocism on debit interest, but with an "authorization" mechanism that actually allows compounding.
| Aspect | Description |
|---|---|
| Annual Periodicity | Interest (both debit and credit) must be calculated with the same periodicity, in any case not less than one year. Usually the deadline is December 31 of each year. |
| Exigibility | Debit interest becomes due only from March 1 of the year following that in which they accrued. |
| Authorization for Debit | This is the crucial point. Art. 120 TUB provides that the customer may authorize in advance the debit of interest on the account when they become due (March 1). |
4. The Return to Annual Periodicity
The old quarterly capitalization must be forgotten. Since 2016 (CICR Resolution No. 343), interest calculation strictly follows an annual cycle.
The Reciprocity Principle
The law requires that debit interest (those paid to the bank) and credit interest (those the bank recognizes to the customer) be calculated with the same periodicity.
If the bank calculates debit interest once a year, it must do the same for credit interest in favor of the account holder.
5. The "March 1" Mechanism
Debit interest accrued on December 31 cannot be debited immediately. They become due only from March 1 of the following year.
Guarantee Window
This two-month interval is a "guarantee window": the customer has time to pay interest separately, preventing them from being added to capital.
6. The Authorization Clause: Where "Lawful" Anatocism Originates
Today, anatocism is not prohibited absolutely, but is conditional on consent. Art. 120 of TUB provides that the customer may authorize in advance the debit of interest on the account.
If Authorized:
- • On March 1, interest is merged with capital (capitalization)
- • From that moment, the total amount will start generating new interest
- • This is authorized and lawful anatocism
If NOT Authorized:
- • Interest remains a separate debt
- • The bank cannot apply interest on that interest
- • But has the right to request immediate payment and, in case of inertia, initiate credit recovery procedures
Why Does Almost Everyone Sign the Authorization?
In practice, authorization is contained in almost all standard contracts. The reason is purely operational: it allows the system to "auto-extinguish" the interest debt using account liquidity, avoiding the customer having to manage manual bank transfers every year to cover accrued charges.
7. Late Payment Interest: The Exception to the Prohibition
Important: The prohibition of anatocism does NOT apply to late payment interest, which continue to follow the rules of the Italian Civil Code.
8. In Summary
Today, banking anatocism has not "disappeared," but has moved from quarterly automatic to an annual consent-based mechanism.
The Three Fundamental Points:
Anatocism is today annual and never quarterly
Consent is always revocable
Reciprocity is mandatory: there cannot be different standards between bank and customer regarding calculation frequency
Practical Advice for Businesses and Individuals
Always verify in your year-end statements the correct application of value date to March 1. Capitalization prior to this date is, by law, null and void.
Frequently Asked Questions
Q: Is anatocism still prohibited in Italy?
A: Today, anatocism is not absolutely prohibited, but is conditional on the customer's consent. Since 2016, interest capitalization is annual and requires the customer's advance authorization under Art. 120 TUB.
Q: What does CICR Resolution No. 343 of 2016 provide?
A: CICR Resolution No. 343 introduced the obligation for annual periodicity in interest calculation, the March 1 effective date for the due date of debit interest, and the possibility for the customer to authorize in advance the debit of interest.
Q: Can I revoke authorization for capitalization?
A: Yes, consent is always revocable. However, revocation does not have retroactive effect and interest already capitalized remains due.
Q: How do I verify if my bank correctly applies anatocism?
A: Verify that in your statement, the value date for debit interest is set to March 1. Capitalization before this date is void. Contact us for a thorough analysis of your statements.
Q: What is the difference between quarterly and annual anatocism?
A: Quarterly anatocism (now prohibited) capitalized interest every three months. Annual anatocism (current) capitalizes interest once a year, on December 31, with due date from the following March 1.
Do You Want to Verify if Your Bank Correctly Applies Anatocism?
If you have doubts about the correctness of interest applied by your bank, on statement calculations, or on capitalization, contact us for specialized advice.
How We Can Help:
- Analysis of bank statements and verification of capitalizations
- Calculation of illegitimate anatocistic interest
- Unjust enrichment recovery action for undue interest
- Verification of authorization clause and its revocability
Attorney Carlo Carta
Banking & Financial Law