Practicing Success
Practicing Success
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The Limitation Law passed in 1859 by the British was to :
(1) Encourage moneylenders to give loans to ryots without legal bonds
(2) Give autonomy to moneylenders to decide the rate of interest
(3) Stop manipulation and forging of accounts by moneylenders
(4) Encourage accumulation of interest over time |
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In 1859 the British passed a Limitation Law that stated that the loan bonds signed between moneylenders and ryots would have validity for only three years. This law was meant to check the accumulation of interest over time. The moneylender, however, turned the law around, forcing the ryot to sign a new bond every three years. When a new bond was signed, the unpaid balance- that is the original loan and the accumulated interest- was entered as the principal on which a new set of interest charges was calculated. |
