Alternative Pricing Mechanisms for Islamic Financial Instruments: Economic Perspective
AbstractThe Islamic banking industry has been trying for the last two decades to extend its outreach to expand its operation business and services in a comparable zone to conventional banking. This paper discusses one of the important hurdles in the growth of Islamic banking which is the use of KIBOR as benchmark for pricing the Islamic banking products. Muskun home financing product of BankIslami Pakistan Limited is used in this paper to elaborate the pricing and benchmarking of product, spread between the conventional interest rate and Islamic profit rate as well as the alternative product pricing mechanism to be used by Islamic banks for this product. Details of Muskun home financing product are discussed in this paper in addition to the marketing strategy, market approach, product development, and all other relevant processes.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 20683.
Date of creation: 01 Feb 2010
Date of revision:
Islamic Economics; KIBOR; Benchmarking; Pricing; Riba based system; Confidence;
Find related papers by JEL classification:
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- Z12 - Other Special Topics - - Cultural Economics - - - Religion
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- A10 - General Economics and Teaching - - General Economics - - - General
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-27 (All new papers)
- NEP-ARA-2010-02-27 (MENA - Middle East & North Africa)
- NEP-CWA-2010-02-27 (Central & Western Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Brooks,Chris, 2008. "Introductory Econometrics for Finance," Cambridge Books, Cambridge University Press, number 9780521694681, December.
- Alsayyed, Nidal, 2010. "Sukukization: Islamic Economic Risk Factors in Shari’ah View," MPRA Paper 20489, University Library of Munich, Germany, revised 15 Feb 2010.
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