Beva Metzia 61 - Two Forms of Interest: Neshech and Tarbit


"Neshech" means "to bite," because interest "bites" the borrower. Neshech denotes interest prohibited by the Torah. Examples of neshech are lending four coins with the stipulation to be paid back five, or lending two measures of wheat and be paid back three.
"Tarbit" means "increase." Tarbit denotes interest prohibited by the Sages. An example of tarbit is a forward contract for produce, where a buyer pays now at current prices for goods to be delivered later. The buyer wants to protect himself from price increase, and it is allowed if the seller has the goods in stock, or if the market price on the goods is stable.