Selected Halachos Relating to Parshas Behar-Bechukosai
By Rabbi Doniel Neustadt
The following is a discussion of Halachic topics related to the Parsha of the week.
For final rulings, consult your Rav.
Matters of Interest
INTEREST(RIBBIS)WITH A CORPORATION
Although it is explicitly forbidden for an individual to charge or pay ribbis, does the prohibition of ribbis apply also to corporations?
There is some misunderstanding regarding this
halachah. A lenient ruling by Harav M. Feinstein (1) holds that a
corporation may pay ribbis for deposits, loans, or credits which
it receives, even if the corporation is totally owned by Jews.
The reason for the leniency is that a "borrower" is halachically
defined as someone who has personal responsibility to pay a
loan. When a bank or another corporation is the "borrower", the
loan is guaranteed by the company's assets, but not by any
individual. Thus there are no Jewish "borrowers" and ribbis may
be paid by the bank or the corporation.
This ruling of Harav Feinstein has been accepted by some poskim
and rejected by others (2). Obviously, if possible, a proper
heter iska (3) should be made before drawing interest from a
Jewish-owned bank. If it is difficult to do so, there are poskim
who allow taking the interest, as per Harav Feinstein's ruling.
[Note that a heter iska does not allow a Jewish-owned bank to
offer free gifts to depositors if the gift is chosen and
delivered at the time of deposit, since such gifts are a form of
Under no circumstances, however, is it permitted to borrow
money from a Jewish-owned bank or corporation. Since the
borrower is an individual who accepts personal responsibility to
repay the loan, the above leniency does not apply (5).
Similarly, lending money to a Jewish-owned corporation with the
personal guarantee of repayment by the owners would be
prohibited even according to Harav Feinstein's lenient opinion.
For the above reason it is prohibited to buy shares in a
publicly traded bank which has a majority of Jewish owners and
does not use a proper heter iska when borrowing money from
Jews (6). A company in which most of the shareholders are not
Jewish but the Jewish minority has significant enough holdings
that their opinion carries weight in management decisions, is
also considered a Jewish company according to the opinion of
many poskim (7).
We have previously mentioned the concept of heter iska. While it
be would be almost impossible to explain the logic behind this
very complicated transaction, suffice it to say that heter iska
is a tool--debated, revised, and perfected over many centuries--
with which a lender may lend money to a borrower and be
halachically permitted to collect interest on the loan. It is a
legal document which transforms the loan [or part of it] into an
investment, with a remote chance of loss of principal to the
lender. Since ribbis is only forbidden when a fully guaranteed
loan takes place, this tool allows the lender to earn "profits"
from his "investment" as opposed to "interest" from a "loan",
and it is therefore permitted. Heter iska transactions are very
common today and, when done under the auspices of an expert in
these matters, are used in many business dealings in a
We must, however, point out an important reminder. According
to the opinion of most poskim, including the foremost poskim of
our generation (8), a heter iska is valid only if the money is
being borrowed to invest in a business or in a property, or if
the money being borrowed will free other money to be used for a
business transaction. A person who borrows money to pay for his
daughter's wedding, for instance, or for any other ongoing
expenses, and does not have any profit-generating holdings or
assets, may not use a heter iska to borrow money (9).
Many people are not aware of this limitation and are constantly
borrowing money, or over-drafting their bank accounts from
Jewish-owned banks, relying on a heter iska which is
unacceptable according to most views. Certainly, one who is
scrupulous and is generally not lax when it comes to other
mitzvos of the Torah, should be aware that this transaction is
not valid according to the majority opinion, and that it may be
Biblically prohibited (10). When this situation arises, an expert
rav should be consulted, since there are methods that can be
utilized in order to make this transaction valid according to
most poskim (11).
NEIGHBORS BORROWING GOODS
Does the prohibition of ribbis apply to neighbors
borrowing goods from each other?
The prohibition of ribbis applies to goods borrowed
between neighbors. A neighbor who borrows two challos may return
only two challos to the lender (12). If a 5 lb. bag of sugar is
borrowed, only that amount may be returned. There are, however,
several notable exceptions to this prohibition:
If the difference between the item borrowed and the item
returned is insignificant to the degree which people generally
do not care about, the prohibition does not apply; a slightly
bigger challah, therefore, may be returned (13).
When neighbors have a type of relationship where they are in the
habit of borrowing from each other without being careful to
return everything they borrow, then the prohibition of ribbis
does not apply. This is because the neighbors are not
"borrowing" from each other; they are giving each other
gifts (14). [Note that many neighbors do not have such a
When the borrower is uncertain of the precise amount he
borrowed, he may return an amount which is great enough to
assure that the loan is paid up (15).
A neighbor who borrows an item from his friend may return that
item exactly as borrowed, even if the price of the item has gone
up in the interval. This is permitted because prices tend to
fluctuate by small amounts and neighbors generally are not
particular about such a small difference (16).
1 Igros Moshe Y.D. 2:63.
2 See the various views in Har Tzvi Y.D. 126; Harav Y.E. Henkin
in Eidus l'Yisrael, pg. 170; Minchas Yitzchak 1:3;4:16-17;
Chelkas Yaakov 3:190; Minchas Shelomo 28; Bris Yehudah 7, note
3 One must investigate the validity of the heter iska before
dealing with a Jewish-owned bank. See Kol ha-Torah # 40 for a
review of the recently discovered halachic problems with the
heter iska of Israel's banks. Note that many Israeli banks have
4 Bris Yehudah 38 note 10.
5 Igros Moshe Y.D. 2:63.
6 Bris Yehudah 40 note 21
7 Harav M. Feinstein and Harav Y. Roth (quoted in Mishnas Ribbis
2, note 7).
8 Igros Moshe Y.D. 2:62; Harav S.Z. Auerbach and Harav S. Wosner
(quoted in Kitzur Dinei Ribbis, Kuntres Acharon 13:3); Harav
S.Y. Elyashiv (quoted in Toras Ribbis 16, note 85).
9 Stocks, certificate of deposits, pension plans, or other
saving accounts which generate a profit, are considered like a
business; Toras Ribbis 16:15. The amount of money lent must be
no greater than the amount of money which is generating the
profit; Harav S.Z. Auerbach, ibid.
10 Note that there are lenient views, based on the ruling of the
Sho'el u'Meishiv (1:3-160); see Darkei Teshuvah 177:41; Chelkas
Yaakov 3:199; Bris Yehudah 38, note 18.
11 See Kol ha-Torah, # 43, pg. 250-259 for a lengthy explanation
of this issue.
12 Y.D. 160:17.
13 Bris Yehudah 17, note 6; Mishnas Ribbis 6, note 5. See also
L'horos Nosson 6:76.
14 The Laws of Interest, pg. 35.
15 Minchas Yitzchak 9:88.
16 Mishnah Berurah 450:2 based on Rama Y.D. 162:1. See Sha'ar