Studies in Ancient Hindu Polity (Based on the Arthashastra of Kautilya), Vol. I c14.s3.8

c14.s3.8

20 kārshāpaṇas may be taken every month; thus the law is not violated" (II, 51, p. 16, S. B. E.). One kārshāpaṇa being equal to 20 māshas, the rate is 1¼ p.c. per mensem. Nārada also refers to Vāsishṭha: "Let a money-lender take in addition to the principal the interest fixed by Vāsishṭha, viz. an eightieth part of a hundred in every month" (I, 99, S. B. E.). Bṛihaspati prescribes an eightieth part of the principal to be the interest on it every month (XI, 8, S. B. E.), while Gautama says: "The legal interest for money lent is at the rate of 5 māshas for 20 kārshāpaṇas per month" (XII, 29, S. B. E.). On the strength of the other Saṃhitās, these two passages would no doubt be taken to relate to the case of secured loans. Baudhāyana, however, differs from all the above authorities by prescribing a different rate of interest, viz. 1 p.c. per month. His rule is that "a sum of 25 kārshāpaṇas shall bear an interest of 5 māshas per mensem" [I, 5, 10—(22), S. B. E.]. He does not expressly apply it to cases of secured loans; but even if it be taken to apply to unsecured loans, the difference from the other Saṃhitās does not cease; for almost all the authorities quoted above, including Vishṇu and Hārita, expressly mention that the creditor may take 2, 3, 4 and 5 p.c. (and not more) as monthly interest on unsecured loans according to the order of the castes, e.g., a Brāhmaṇ debtor has to pay 2 p.c. per month, a Kshatriya debtor 3 p.c. per month, and so on. So Baudhāyana is the only dissentient authority in regard to this point.