Modern business encounters potential ribbis issues on a daily basis. Q: What are the prohibitions of ribbis (charging interest)? Who violates them?
A: The lender violates the prohibitions, “Do not take interest from him … Do not give him your money for interest” (Vayikra 25:35-36); the borrower violates, “Do not provide interest to your brother” (Devarim 23:20); the guarantor and witnesses violate, “Do not place interest upon him” (Shemot 22:24); and the scribe (lawyer) violates, “You shall not place a stumbling block before the blind.” (Vayikra 19:14)
The Torah prohibition includes any loan of money, food or other items with a fixed-return interest (ribbis ketzutza). The Sages prohibited many others transactions that include elements of interest (avak ribbis), including: floating-rate or non-guaranteed returns (ribbis she’aina ketzutza), business arrangements that contain elements of interest (ribbis derech mekach u’memkar) or resemble interest (mechzei k’ribbis), and even favors performed on account of the loan (ribbis devarim).
There are many detailed laws of ribbis. An excellent English-language sefer is: “The Laws of Ribbis,” by Rabbi Yisroel Reisman, published by Artscroll/Mesorah.
The Mishna (B.M. 75b) teaches that the lender, the borrower, the guarantor, the witnesses, and even the scribe (lawyer) violate when engaging in an interest-bearing loan. This is true even if the borrower is wealthy and willingly agrees to pay the interest. (Yoreh De’ah 160:1,4)
Authored by Rabbi Meir Orlian
These articles are for learning purposes only and cannot be used for final halachic decision. The Business Halacha email is a project of Business Halacha Institute (www.businesshalacha.com) and is under the auspices of Rav Chaim Kohn.