Question

The hundis were in circulation in India even before the present Negotiable Instrument Act, 1881 came into operation.

• A. True
• B. False
• C. Partly true
• D. None of the above

Answer 1

Answer: (A)

True

A Hundi is a negotiable instrument written in an oriental language. The term ‘Hundi’ includes all indigenous negotiable instruments whether they are in the form of notes or bills. But they are mostly of the nature of bills of exchange. They are virtually inland bills of exchange and recognized by custom and law in India. Hundis are very popular among the Indian merchants and indigenous bankers from ancient times.