What is a Hundi? | Medieval Indian Financial Terms
A Hundi is a financial instrument that served as a 'Bill of Exchange' in Medieval India, allowing merchants to transfer funds and secure credit for trade.
Primary Reference: NCERT Class VII - Our Pasts II
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Exam Year
2020
Evidence Source
UPSC Level
Which of the following phrases defines the nature of the 'Hundi' generally referred to in the sources of the post-Harsha period?
[UPSC CSE Prelims 2020]
Detailed Solution & Historical Context
Concept
Pre-modern banking and trade relied on indigenous credit instruments to facilitate long-distance commerce without the physical transfer of large amounts of gold or silver.
Authentic Source Evidence
Historical texts on Indian commerce define 'Hundi' as 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.
Analytical Breakdown
Conceptual Deep Dive & Logic
"How did the Hundi system support long-distance trade?"
Examiner's Mindset & Pro-Tip
"The Hundi reflects the sophistication of the Indian mercantile class and their ability to create an informal banking network that predated modern financial systems."
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