This is the third book of the series of Notes on Islamic Economics. It studies the Islamic finance and banking part of Islamic economics in eighteen chapters. chapter 1 foundation of islamic finance chapter 2 principles of islamic finance chapter 3 introduction to islamic finance contracts chapter 4 overview of islamic finance contracts chapter 5 characteristics of islamic finance chapter 6 maqasid al shari’ah in the prohibition of riba chapter 7 islamic financial intermediation chapter 8 comparison of islamic finance with conventional finance chapter 9 islamic banking and development chapter 10 success factors of islamic banks chapter 11 the rise of a power alliance of wealth and shari’ah scholarship chapter 12 strategic trends in islamic banking and finance chapter 13 risk management in islamic banking chapter 14 innovation in liquidity management instruments chapter 15 sukuk: islamic alternative to bonds chapter 16 service sukuk for financing public utilities chapter 17 cooperative micro finance: an islamic approach chapter 18 ethical values in conventional and islamic finance.