Hindu Law and Custom (Recht und Sitte) c8.76

c8.76

The law-books seek to effect a limitation of usury also by forbidding certain particularly oppressive forms of interest and by declaring certain debts to be free from interest. Thus M. 8, 153 forbids taking interest beyond one year and also such as is unapproved i. e., according to the oldest commentaries, all short period interests, interest on interests, periodical or monthly payable interests, and usurious interests fixed on special agreement as well as body interests, i. e. those which would have to be worked off by physical labour of a man or an animal (kāyika, according to another explanation daily payable interest). Of course this passage and other similar passages are in open discord with the rules of other law-books; M. himself in 8, 155 permits compound interest in the veiled form that in the renewed agreement the interests in arrear should be added to the principal and the same process is observed to this day. M. also allows the working off of a debt (8, 177). *Inter alia*, the following are mentioned on which no interest can be charged²: reward, gambling debts, improper promises (e. g. made to a courtesan), deposits, the price for a purchased ware, friendly loans, loans particularly mentioned to be free of interest (*uddhāra*, which is explained as *niṣphalam ṛṇam*), and articles lent for use (*yācitaka*), as well as the property of a woman (*Strīdhana*) used by the male relations with her permission, liabilities for securities, fines and the articles mostly of little value such as wood, grass, thread etc. mentioned in Bṛh. 11, 16 referred to above, the reading of which however is certainly faulty. Yet under certain circumstances e. g. if the debtor refuses to the take back the property or generally after the lapse of a short period, interests could be charged on some articles of these categories and indeed at the rate of 5 p. c. per month, which is another proof of the universality of this rate of interest.¹ A loan is free of interest also when the creditor refuses to accept the due interest and particularly if the debtor deposits the interests with a trustworthy person (Y. 2,44).