Housing deficiency and population increase around the globe has led to a search for more cost effective, environment friendly, easy and fast ways of construction. Out of many technologies found, mortar-free interlocked masonry systems were developed to eliminate the deficiency of traditional masonry like poor workman ship, weak brick-mortar interface etc. For such systems against earthquakes, lateral resistance can be enhanced with plaster. But there is a need to further improve the performance of plaster in mortar-free interlocking walls for better ductility. Therefore, in this study, non-plastered wall (as a datum) was compared with plain and fibrous-plastered masonry walls using natural fibres like rice straw and sisal fibres. 2% fibres (by mass of cement) was used. 2200 mm high interlocked block masonry walls (mostly used in poor developing countries) were experimentally tested for out of plane resistance. The research aim was to evaluate the mechanical and dynamic parameters like elastic stiffness, first crack load, energy dissipation, toughness index, frequency and dynamic stiffness. Detail discussion was made on fibrous plaster behaviour. Analytical design flow chart was also developed to evaluate the lateral resistance of the fibrous plastered masonry walls. Sisal fibre reinforced plaster was found better than rice straw reinforced plaster. The factor of increase in peak load, elastic stiffness, energy absorption and toughness over datum was found to be up to 229%, 14 times, 395% and 127%, respectively, for sisal fibre reinforced plastered walling system.