Islamic finance has seen its revival in last 50 years especially in the banking sector. Riba, Qimar, Gharaar and Gambling are such activities which differ from the Islamic conventions in finance and banking. All the modes and products offered by an Islamic banking institution (IBI) are bases on the sources of shariah especially the Quran & Hadith. IBI’s use the same KIBOR as conventional banks. Karachi interbank Offered Rate (KIBOR) set by central bank (SBP) is used as a benchmark by both Islamic and conventional banks, to calculate the profit or interest. It has nothing to do with the transactions. Profit calculation with KIBOR as a benchmark and doing interest based transactions are contrary to each other. All schools of thought have a consensus on it and have constituted a body called ‘ Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI)’ based in Bahrain, which directs and monitors the execution of Islamic modes of finance around the Globe with the help of respective central banks of countries. Islamic banking is playing a vital role in socioeconomic sector, creating opportunities for the masses. Islamic banking or finance is to gain Allah’s consent along with the compliance of Shariah. 

MUHAMMAD ADEEL KHAN, 

Karachi, October 23.