Are the financial instruments provided by Islamic Banks interest free or interest masking ?

Good question. I believe the answer really depends on which Islamic Bank we're looking at and which specific instrument are we examining. From my experience, I've seen both, the interest free (buy/sell base transactions for example Murabaha) and I've seen the forms of Tawarruq which falls into back to back sales (Ba^ul ^Aynah) which is forbidden in Islam.