Studies in Ancient Hindu Polity (Based on the Arthashastra of Kautilya), Vol. I c14.s3.7

c14.s3.7

² This rate of interest, viz. 1¼ p.c. per month, is also found in the Saṃhitās. The question is whether it was charged on a secured debt or not. Vyāsa is very explicit on this point. He says: "Monthly interest is declared to be an eightieth part of the principal, if a pledge be given; an eighth part is added if there be only a surety; and if there be neither pledge nor surety, two in the hundred may be taken from a debtor of the sacerdotal class" (see Cole.'s Digest, i, 80). Yājñavalkya also makes 1¼ p.c. per month the interest on a secured loan, for he enjoins that "on a secured loan the interest every month is one-eightieth part of the principal" (II, 38, M. N. Dutt's ed.). Manu, Vasiṣṭha and Nārada are at one on this point. "A money-lender may stipulate, as an increase of his capital, for the interest allowed by Vasiṣṭha, and take monthly the eightieth part of a hundred" (Manu, VIII, 140, S. B. E.). According to the commentators Kûll., Nār., Ragh., and Nand., the rule refers to a secured debt, but Med. and Gov. think that the rule refers to cases where the creditor is able to live on this interest and is not compelled to take a higher rate for his living. However, the former is the view accepted on all hands, supported as it is by the parallel passages of Yājñ., etc. (see also Cole.'s Digest, i, 24). Vasiṣṭha's text runs thus: "Hear the interest for a money-lender declared by the words of Vasiṣṭha: 5 māshas for