What rate of interest did Kubera charge?

It is fairly well established that Tirupati Venkataramana (it is Venkataramana and not Venkateshwara – remember that it is a Vaishnavite temple) took a loan from Kubera in order to finance his wedding to Padmavati. And till date, Venkatarmana has been soliciting contributions from visitors to his shrine in order to help him pay off this loan. Given that the loan was for the purpose of getting married, I think we can quickly establish that it was a Personal Loan. What I’m trying to figure out, however, is what rate of interst did Kubera charge Venkataramana.

For starters, I think somewhere in our scriptures, we can find out the amount that Venkataramana borrowed. Rupees didn’t exist in that era, but I’m sure we can find some figures in terms of gold, or other commodities. And we should be able to estimate the rupee value of this loan by suitable backward extrapolation.

What might be slightly tougher is the time period. When did Kubera exist? When did Venkataramana exist? When did he get married to Padmavati? The date is important, for we should know how many years to discount for when we do the IRR calculations. However, I’m sure that with sufficient effort, we should be able to find the date of this particular transaction to the nearest millenium.

Then, there are the loan repayments. Let us assume that Venkataramana is in general a poor man, and his repayments can be approximated to the amount of offerings he receives from visitors to his shrine. Catch a few people sitting for McKinsey interviews, and estimating this amount is also not going to be very tough. We should be able to get fairly accurate figures for the last few years, and then we should be able to appropriately extrapolate backwards accounting for various regime changes (I’m assuming here that the temple, for whatever reason, will refuse to cooperate in this noble endeavour – else we can get the repayment amounts from the temple books).

We also need to remember that the repayment is not complete. People still contribute generously to the Venkataramana Personal Loan Repayment Fund. However, if we assume that the loan has already been repaid, we can get a floor on the rate of interest that Kubera charged. It is intuitive right – that if more money pours in, the interest rate would’ve been higher? Let us also assume that there were no repayments till about five hundred years ago, which was approximately when the temple was built. Assuming zero repayments till then, it again gives a floor on the interest rate.

Obviously, I don’t already have any of the data that I’ve mentioned here, so I can’t actually do the calculations. However, if McKinsey decides to solve this problem, they can do so in March during their interviews at IIMs. My prediction, however, is that the rate of interest will come out to be a number which, in normal circumstances, would be found to be usurious. Thus, we might probably be able to show that people are contributing to funding a greedy usurious rich moneylender when they contribute to the Venkataramana Personal Loan Repayment Fund. I don’t know what further use this might be put to, but I think the process will be an end in itself.

On a closing note, I would like to point out the greatness of our culture – which, even in mythological times, could boast of complicated financial products such as Personal Loans. This one factor, I think, is enough to show that our Indian culture is superior to all other cultures.

PS:  Sometime back, I was wondering if the Venkataramana Personal Loan Repayment Fund could be the largest money-laundering operation in India. However, a little thinking revealed that our political parties are definitely far far ahead when it comes to that.

7 thoughts on “What rate of interest did Kubera charge?”

  1. Though I usually find most satire/humor writing drawing on our myths downright silly, I should admit that I find yours quite creative and brilliant! May be you have observed religious circles from closer quarters than the author(s) of the Pandey stuff etc.

    As an aside, I would be quite interested in knowing your take on what Scott Adams has recently written about the “end of capitalism”.

    1. have stopped subscribing to Scott Adams. somehow found him repetitive and unfunny, and in any case if he writes something really good, someone in my friends list will share it on Google rEader.

      the Pandeys know nothing. most of them can’t tell Rama from Krishna. theirs is a one-idea-blog. i don’t see them going too far.

  2. LOL.

    Tough problem indeed. I’m more concerned about what the terms of the loan could have been. If Venkataramana is issuing coupon payments till the debt matures, I’m ok with it – As I’ve heard stories that when the debt matures, the world will end and all that. I really really don’t want it maturing, and it’s highly unlikely that the debt will be paid off considering that the coupon payments itself are so high. If Venkataramana is repaying through EMIs (minus the equated part), watch out everyone.

    1. it’s a simple perpetuity. I don’t see what is hard to understand in that.

      and now – this shows that ancient Indians knew about Geometric Progressions. we are greater.

  3. Think about how Venkataramana must be feeling…the Hundi is right outside his doors…but all the money is seeping into the pockets of TTD officials…lol

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