The State in Ancient India: A Study in the Structure and Practical Working of Political Institutions in North India in Ancient Times c8.62

c8.62

Gautama, like Vasiṣṭha, prescribes five mâṣas for twenty kârṣâpaṇas as the rate of interest which, according to the commentator Haradatta, works out to 15 p.c. per annum.² For some articles, however, such as gold and flavouring substances, Gautama admits higher rates of interest.³ He recognises no less than six forms of interest, *viz.*, compound interest, periodical interest, stipulated interest, corporal interest, daily interest and the use of the pledged article.⁴ He remarks that when the principal has been doubled, interest ceases and that when the article pledged is used by the creditor, the loan bears no interest at all.⁵