Loans and Interest in Sanskrit Legal and Mathematical Texts

In Sanskrit legal texts, much space is devoted to the subject of loans and interest. Moreover, almost all Sanskrit mathematical texts contain rules and illustrative problems related to this subject. In the present essay, an attempt is made to study these diverse types of Sanskrit sources in a combined manner and to see what light they throw on the actual state of affairs in lending money on interest. The first part deals with the nature and chronology of the administrative and legal texts and with the rules laid down in these texts on money lending, the fair rate of interest and the maximum extent to which the interest can accumulate. The second part is devoted to the rules of computation relating to loans and interest as formulated in the mathematical texts and to the examples to illustrate the rules, which are provided in the texts and in their commentaries.