Is Interest Forbidden for Jews?

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The most often discussed issue with respect to corporations is that of “ribit” – lending or borrowing at interest from a Jew. The Tosefta (Bava Metzia 5:8) clearly states that the prohibition of interest is dependent only on who owns the lent funds – not on who manages them.

Since these funds belong jointly to all of the shareholders, both lenders and borrowers seem to be taking part in a forbidden interest transaction among Jews. This stringent position is indeed that of the Kitzur Shulchan Arukh (65:28).

However, in the case where the majority of shareholders, as well as the majority of lenders, are non-Jews, many authorities take a lenient view.