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KIBOR - Shirazi - 10-27-2010

Dear All,

1- What is KIBOR?
2- If it is Haram, so why are Islamic banks charging KIBOR differences to their leasing cutomers and calculating profit on the basis of KIBOR?

Plz guide and help urgently,


- noman - 10-27-2010

Kibor is interbank borrowing rate....its index/benchmark against which every one base their prices...
so to stay competitive the islamic banks also follow it determine their pricing n stuff..
ideally they should not be based on this and should have some independent criteria to determine their pricing n operations......but as of now...they are stuck with it......i myself don't see islamic banking as being islamic untill they find an altternative to KIBOR based pricing.