Which of the following phrases defines the nature of the ‘Hundi’ generally referred to in sources of the post-Harsha period?

1. An advisory issued by the king to his subordinates
2. A diary to be maintained for daily routine
3. A bill of exchange
4. An order from the feudal lord to his subordinates

Explanation

Option (c) is correct

• The term hundi is derived from Sanskrit hundika, the earliest usage of which dates back to 914 AD.
• The Lekhapaddhati and Kalhan’s Rajatrangini (12^th century) refer to the use of hundika by kings and nobles to make payments but it may have been used by merchants as well.
• The banker accepted short-term time deposits against bills of exchange (hundi). The hundi was a piece of paper, usually written in Hindi or any other Indian language, promising the payment of a sum of money to the bearer at a particular place either immediately or afterwards. Medieval Indian bankers like sarrafs, mahajans, and sahukars accepted deposits and provided interest-bearing loans.
• They issued hundis—promissory notes used as bills of exchange—facilitating money transfers and credit. Darshani hundis were payable on sight, while miyadi hundis were redeemable after a set period.

Answer: (c) A bill of exchange; Difficulty Level: Easy