What were the reasons of tension between relations of moneylenders and ryots after the decline of Maharashtra’s cotton export?

With the decline of cotton export, moneylenders and export merchants of Maharashtra were no longer keen on providing long term loans. Ryot community became very angry as they were denied of loans by moneylenders. They were not infuriated that they came under great debt, but they were infuriated because moneylenders were insensitive to their miserable condition. Moneylenders were also disobeying the traditional customs and rules of rural areas.

Deviousness of Moneylenders : The process of moneylending was definitely widespread even before the colonial rule. Moneyleanders were generally very powerful individuals. A number of customary norms were there between the relations of moneylenders and ryots and these norms even regulated their relations. One of the general norm was that the interest charged must not be more then the principal amount. This norm was made to limit the exactions of moneylenders and to define the term ‘fair interest’. But this norm was generally violated by the moneylenders during colonial rule. In one of the case investigated by Deccan Riots Commission, money-lender charged more than Rs. 2000 of interest on the principal of Rs. 100. Ryots gave a number of petitions or complaints about injustice of such exactions and the violation of this traditional custom.

Peasants came to see the moneylenders as deceitful as devious. They complained that moneylenders were manipulating the laws and were forging the accounts. The British passed a Limitation Law in 1859 which states that the bond of loan signed between moneylender and ryots would be valid only for three years. The main objective of this law was to stop the accumulation of loan for a long time. But moneylenders turned the law around in their own favour. They forced the ryots to sign a new bond after every three years. The new bond included the original loan and accumulated interest and new set of interest was charged on sum of the both. In the petitions submitted by ryots to Deccan Riots Commission described that law of this process worked and how different methods were used by moneylenders and these were:

(i) Ryots were not given any receipt in case of payment of loans.

(ii) Moneylenders entered fictitious figures in the bonds.

(iii) Moneylenders used to buy peasant harvest at low prices and finally took over the property of peasants.