Question

UPSC Prelims 2020 Question:

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

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

Answer (Detailed Solution Below)

Option 3: A bill of exchange

Detailed Solution

Explanation:

Hundis refer to bills of exchange evolved in the Indian subcontinent. It was used in trade and credit transactions. They were used:

as remittance instruments (to transfer funds from one place to another)
as credit instruments (to borrow money)
for trade transactions (as bills of exchange)

Technically, a Hundi is an unconditional order in writing made by a person directing another to pay a certain sum of money to a person named in the order.

Therefore, option (3) is the correct answer.

Subject: History | Miscellaneous(hist)

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