Question 25

In the context of the history of India, particularly from the post-Harsha period onwards (which spans medieval and early modern times), a 'Hundi' (also spelled 'Hundee' or 'Hundi') refers to a bill of exchange.

• Functionality: Hundis were indigenous financial instruments used for various purposes, primarily facilitating trade and credit. They allowed merchants to transfer funds from one place to another without physically carrying cash. A merchant could deposit money with a Hundi banker in one city and receive a Hundi, which could then be presented to another Hundi banker (or agent) in a different city to receive the equivalent amount.
• Types: Hundis could function as bills of exchange, promissory notes, or simply as informal credit notes. They were crucial in enabling long-distance trade and commerce across different regions of India and even internationally.
• Historical Significance: The Hundi system was a sophisticated indigenous banking practice that predated and continued to operate alongside modern banking systems. It demonstrated a well-developed financial infrastructure in pre-colonial and early colonial India.

Let's look at why other options are incorrect:

• A) An advisory issued by the king to his subordinates: This would be more akin to a 'farman' or an official decree, not a Hundi.
• B) A diary to be maintained for daily accounts: This describes a ledger or an account book, not a Hundi.
• D) An order from the feudal lord to his subordinates: This would be a directive or an instruction, not a financial instrument like a Hundi.

Therefore, a 'Hundi' is best defined as a bill of exchange.