India as Known to Panini: A Study of the Cultural Material in the Ashtadhyayi c9.s6.t1.47

c9.s6.t1.47

*INTEREST*—Pāṇini mentions a definite rate of interest in the expression *daśaikādaśa*, the creditor who gets back 11 (*ekādaśa*) by lending 10 (IV.4.31). This amounts to the rate of about 10 percent considered usurious, and is condemned as such (*garhya*) by Pāṇini. Kauṭilya takes the lawful rate of interest to be 1¼% per month, (*sapāda-paṇā dharmyā māsa-vṛiddhiḥ paṇa-śatasya*, *Arth.* III.11). Manu (VIII.140-43) and Yājñavalkya quote the same rate and call it as one-eightieth (of the principal) per month. Vasishṭha (II.51) states the legal rate to be five *māshas* a month for twenty *kārshāpaṇas*. Taking the latter to be a *viṁśatika kārshāpaṇa* of twenty *māshas*, the rate of interest works out to one-eightieth part, the same as in Manu. Nārada and Gautama agree with the above, and so also Vyāsa, if the loan is against a pledge. Thus 15% was regarded as an equitable rate of interest (*dharmyā vṛiddhi*). Baudhāyana prescribes 20% as interest (*J.B.O.R.S.*, 1920, p. 117). In contrast to this the rate of the *daśaikādaśa* loans working out to a little less than 11% was considered reproachful in Pāṇini's time. Patañjali cites two more examples of usurious loans, in which the lender earned exorbitant amounts as interest and was rightly censured as *dvai-guṇika* and *traiguṇika* (IV.4.30; II.331). These must have referred to short term petty loans.