Public Administration in Ancient India c21.76

c21.76

per annum. Manu and Chānakya also regard this as the proper rate. Where, however, no security was given, or in cases where no periodical interest was taken, or the loan was returned in kind, higher rates of interest might be demanded. According to some law-givers, the interest demanded from the members of the higher castes was to be less than from those of the lower. On this point Vasishtha quotes the following verse: "Two in the hundred, three, four and five, as has been declared in the Smriti, he may take as interest by the month according to the order of the castes."¹ Some of the law-books also lay it down that interest should cease after a time, and that no debtor should ever be compelled to pay more than double the amount of capital in case of gold and three times in the case of grain.² The fact that usury was strongly condemned must have made the lending of money at interest rather unusual, and it was perhaps this circumstance which prompted Megasthenes to say: "The Indians neither put out money at usury, nor know how to borrow. It is contrary to established usage for an Indian either to do or to suffer a wrong, and therefore, they neither make contracts nor require securities."³