Hundi in the context of traditional Indian trade?

What was a hundi in the context of traditional Indian trade?

A) A type of tax collected from peasants
B) A type of land revenue document
C) A bill of exchange used for transferring money
D) A religious donation receipt

EXPLANATION

In the context of traditional Indian trade, a hundi was:

• A financial instrument or bill of exchange, used by merchants, traders, and bankers.

• It served as a written order directing one person to pay a certain sum of money to another.

• Hundis were used for:

  • Transferring money over long distances,

  • Providing credit, and

  • Facilitating trade safely without the need to carry cash.

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Additional Notes:

• Hundis were written in vernacular languages and widely used during Mughal and British periods.

• They functioned somewhat like modern cheques or promissory notes.

• The system was managed by indigenous bankers (shroffs or seths).

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✅ Hence, the correct answer is:
(C) A bill of exchange used for transferring money