However, they will find that the nominal interest rates that they receive will be low, as compared to the interest rates that they enjoyed during the high inflation period. After all, the simple formula for determining interest rate is: Nominal Interest rate = Real Interest rate + Rate of Inflation. 34.
Closer home, Kautilya, in his Arthashastra written in about 300 B.C., has also mentioned about the existence of powerful guilds of merchant bankers who received deposits, and advanced loans and issued hundis (letters of transfer).