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Q75 (IAS/2020) History & Culture › Ancient India › Ancient trade and ports Official Key

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

Result
Your answer:  ·  Correct: C
Explanation

The correct answer is Option 3.

In the economic history of the post-Harsha and medieval periods, a Hundi was a sophisticated financial instrument used by merchants and bankers. It functioned as a bill of exchange, serving as a written unconditional order involving a person directing another to pay a specific sum of money to a person named in the order.

The significance of the Hundi lies in its role in facilitating long-distance trade without the physical movement of bulky cash, thereby reducing the risk of theft. It acted as both a credit instrument and a means of remittance. Unlike the other options:

  • Options 1 and 4 describe administrative or feudal commands (edicts/orders), whereas a Hundi was strictly a commercial document.
  • Option 2 refers to a ledger or Bahi-Khata, used for record-keeping rather than financial transfer.

Thus, the Hundi represents the advanced indigenous banking system prevalent in pre-colonial India.

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Q. Which of the following phrases defines the nature of the 'Hundi' generally referred to in the sources of the post-Harsha period ? [A] An…
At a glance
Origin: Mixed / unclear origin Fairness: Low / Borderline fairness Books / CA: 2.5/10 · 0/10

This is a classic 'Term Definition' question. While the 'post-Harsha' tag adds a layer of specificity, the term 'Hundi' is a staple of Medieval Indian Economic History found in standard NCERTs and Economy texts. Do not overthink the timeline; if the term matches the function (Bill of Exchange), mark it.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
In Indian history sources of the post-Harsha period, was "Hundi" an advisory issued by the king to his subordinates?
Origin: Weak / unclear Fairness: Borderline / guessy
Indirect textbook clues
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 8: Financial Market > 2020 > p. 246
Strength: 5/5
“Select the correct answer using the code given below: (b) 2 only (a) 1 and 2 only (c) (d) 1, 2 and 3 (c) 1 and 3 only 6. Which of the following phrases defines the nature of the 'Hundi' generally referred to in the sources of the post-Harsha period? (a) An advisory issued by the king to his subordinates (b) A diary to be maintained for daily accounts (c) A bill of exchange (d) An order from the feudal lord to his subordinates 2019 • 7. Which of the following is not included in the assets of a Commercial Bank in India? • (a) Advances (b) Deposits (c) Investments (d) Money at call and short notice”
Why relevant

This source poses a multiple-choice question asking which phrase defines the nature of 'Hundi' in post-Harsha sources and explicitly lists 'a bill of exchange' as an option contrasted with 'an advisory issued by the king'.

How to extend

A student could take this classification clue and check contemporaneous economic/merchant records or standard histories to see if 'Hundi' is treated as a financial instrument rather than a royal advisory.

History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > Council of Ministers > p. 108
Strength: 3/5
“It appears that the ministerial administration during the reign of Harsha was the same as that of the imperial Guptas. The emperor was assisted by a council of ministers (Mantri Parishad) in his duties. The council played an important role in the selection of the king as well as framing the foreign policy of the empire. The prime minister was of the most important position in the council of ministers.”
Why relevant

Describes a ministerial/council system (Mantri Parishad) where advice and advisories were part of polity, indicating that 'advisory' was a recognized administrative concept in the period.

How to extend

A student could compare the kinds of documents produced by councils/ministers (edicts, orders, advisories) with references to 'Hundi' in epigraphic or literary sources to see if 'Hundi' matches those administrative genres.

History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > Pushyabhutis 8.1 > p. 105
Strength: 2/5
“Harsha had known the weakness of a group of small kingdoms and conquered his neighbours to integrate them into his empire. As Thanesar was too close to the threats from the northwest, Harsha shifted his capital from Thanesar to Kanauj. Harsha as King of Kanauj: The magnates of Kanauj (the capital of Maukhari kingdom), on the advice of their minister Poni, invited Harsha to ascend the throne. A reluctant Harsha accepted the throne on the advice of Avalokitesvara Bodhisatva with the title of Rajputra and Siladitya. Thus the two kingdoms of Thaneswar and Kanaui became united under Harsha's rule. Consequently, Harsha transferred his capital to Kanauj.”
Why relevant

Gives an example where magnates and ministers advised political action (inviting Harsha), showing 'advice' as a political mechanism and a possible semantic category for some documents.

How to extend

One could use this example to ask whether 'Hundi' appears in contexts of political counsel or instead in commercial/financial contexts (supporting or refuting the 'advisory' reading).

Statement 2
In Indian history sources of the post-Harsha period, was "Hundi" a diary to be maintained for daily accounts?
Origin: Weak / unclear Fairness: Borderline / guessy
Indirect textbook clues
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 8: Financial Market > 2020 > p. 246
Strength: 4/5
“Select the correct answer using the code given below: (b) 2 only (a) 1 and 2 only (c) (d) 1, 2 and 3 (c) 1 and 3 only 6. Which of the following phrases defines the nature of the 'Hundi' generally referred to in the sources of the post-Harsha period? (a) An advisory issued by the king to his subordinates (b) A diary to be maintained for daily accounts (c) A bill of exchange (d) An order from the feudal lord to his subordinates 2019 • 7. Which of the following is not included in the assets of a Commercial Bank in India? • (a) Advances (b) Deposits (c) Investments (d) Money at call and short notice”
Why relevant

This exam-style item lists possible definitions of 'Hundi' for the post-Harsha period and explicitly includes 'a diary to be maintained for daily accounts' as one option alongside 'a bill of exchange'.

How to extend

A student could treat this as evidence that 'Hundi' has contested or clarified definitions in secondary sources and then consult primary/post‑Harsha documents or standard economic histories to see which option is supported.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > HUNDI > p. 194
Strength: 5/5
“Hundi is a financial instrument (Bill of Exchange) evolved on the Indian sub-continent during medieval period. It was used in trade and credit transactions.”
Why relevant

Defines 'Hundi' as a financial instrument (bill of exchange) used in medieval Indian trade and credit, offering a clear alternative to the 'diary' definition.

How to extend

A student could use this standard definition plus knowledge of medieval trade networks to infer whether 'diary' is plausible, then check primary records or epigraphical references for usage contexts.

Statement 3
In Indian history sources of the post-Harsha period, was "Hundi" a bill of exchange?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > HUNDI > p. 194
Presence: 5/5
“Hundi is a financial instrument (Bill of Exchange) evolved on the Indian sub-continent during medieval period. It was used in trade and credit transactions.”
Why this source?
  • Explicitly defines hundi as a financial instrument and parenthetically as a 'Bill of Exchange'.
  • Places hundi in the medieval Indian commercial and credit context, aligning with the post-Harsha timeframe.
History , class XI (Tamilnadu state board 2024 ed.) > Chapter 16: The Coming of the Europeans > Banking and Rise of Merchant Capitalists > p. 247
Presence: 5/5
“Commercial institutions were also well-developed to promote such extensive trade. Because a variety of coins were in circulation, there were money-changers or shroffs to test coins for their purity and decide their value in current terms. They also served as local bankers. Instead of transferring money as cash from one place to another, merchants issued bills of exchange, known as hundis which would be cashed by shroffs at different destinations at a specified rate of discount. This well-developed infrastructure and organization of trade enabled the rich merchants to amass large fortunes. Such merchant princes or capitalists were found in all parts of India - the banias and Parsi merchants of Surat, the nagarseths of Ahmedabad, the Jagat Seths of Bengal, and the merchant communities of the Coromandel”
Why this source?
  • Describes merchants issuing 'bills of exchange, known as hundis' for transfer and cashing at destinations.
  • Explains operational mechanism—hundi cashed by shroffs at a specified discount—matching bill-of-exchange function.
Exploring Society:India and Beyond ,Social Science, Class VIII . NCERT(Revised ed 2025) > Chapter 2: Reshaping India’s Political Map > DON'T MISS OUT > p. 57
Presence: 4/5
“A hundi was a written instruction to make payment to an individual. It could be carried across political borders and enabled financial transactions without the need to carry currency — a precursor to modern banking. These systems worked across trade networks without the participation of the ruling classes.”
Why this source?
  • Defines hundi as a written instruction to make payment to an individual and notes cross-border use.
  • Emphasizes its role as a cashless payment instrument functioning like a precursor to modern banking.
Statement 4
In Indian history sources of the post-Harsha period, was "Hundi" an order from the feudal lord to his subordinates?
Origin: Weak / unclear Fairness: Borderline / guessy
Indirect textbook clues
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 8: Financial Market > 2020 > p. 246
Strength: 5/5
“Select the correct answer using the code given below: (b) 2 only (a) 1 and 2 only (c) (d) 1, 2 and 3 (c) 1 and 3 only 6. Which of the following phrases defines the nature of the 'Hundi' generally referred to in the sources of the post-Harsha period? (a) An advisory issued by the king to his subordinates (b) A diary to be maintained for daily accounts (c) A bill of exchange (d) An order from the feudal lord to his subordinates 2019 • 7. Which of the following is not included in the assets of a Commercial Bank in India? • (a) Advances (b) Deposits (c) Investments (d) Money at call and short notice”
Why relevant

Contains a multiple-choice question that lists possible definitions of 'Hundi' for the post-Harsha period, explicitly including 'a bill of exchange' and 'an order from the feudal lord to his subordinates'.

How to extend

A student could combine this with external knowledge of medieval Indian economic terms to check which option is accepted in scholarly/primary-source usage.

History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > I Harsha > p. 115
Strength: 3/5
“• The period between the Guptas and the Vardhanas saw many independent principalities. North India lacked a strong central power. • The Huns, Maithrakas of Valabhi, Maukharis of Kanauj, Yasodharman of Mandasor, Pushyabhutis of Thaneswar and Later Guptas of Magadha were sub-regional kingdoms. • Harsha maintained cordial relations with China and the Chinese pilgrim Hieun Tsang recorded the socio-religious conditions of the people of that period.”
Why relevant

States that the period after the Guptas and before Vardhanas had many independent sub-regional kingdoms and lacked a strong central power.

How to extend

Use this political-fragmentation context to assess whether feudal orders (like a lord's written 'order') were common or whether commercial instruments might be more plausible.

History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > Introduction > p. 104
Strength: 3/5
“It rose to prominence under Harsha. Harsha ruled the kingdom as large as that of the Guptas from 606 to 647 CE. 104”
Why relevant

Notes Harsha's rule over a large region and the rise of regional power under him, indicating overlapping suzerainty and subordinate relationships in the era.

How to extend

Combine with basic facts about administrative practices under overlords to judge whether a term like 'hundi' could denote an overlord's order to subordinates versus a commercial instrument used across regions.

History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > Pushyabhutis 8.1 > p. 105
Strength: 2/5
“Harsha had known the weakness of a group of small kingdoms and conquered his neighbours to integrate them into his empire. As Thanesar was too close to the threats from the northwest, Harsha shifted his capital from Thanesar to Kanauj. Harsha as King of Kanauj: The magnates of Kanauj (the capital of Maukhari kingdom), on the advice of their minister Poni, invited Harsha to ascend the throne. A reluctant Harsha accepted the throne on the advice of Avalokitesvara Bodhisatva with the title of Rajputra and Siladitya. Thus the two kingdoms of Thaneswar and Kanaui became united under Harsha's rule. Consequently, Harsha transferred his capital to Kanauj.”
Why relevant

Describes conquest and integration of smaller kingdoms into Harsha's realm and mentions magnates and ministers advising elevation — illustrating lord-vassal dynamics.

How to extend

A student could consider whether such magnate–vassal relations produced documentary orders termed 'hundi' or whether other documentary forms were used.

History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > Administration of Justice > p. 108
Strength: 2/5
“His Si-Yu-Ki provides detailed information about the social, economic, religious and cultural conditions during the reign of Harsha. According to Hieun Tsang, perfect law and order prevailed throughout the empire, as the law-enforcing agencies were strong. The pilgrim records the principal penalties and judicial ordeals practised in India at that time. Corporal punishment for serious offences was in practice. But the death penalty was usually avoided. Offences against social morality and defiance of law were punished by maiming. Harsha travelled across the kingdom frequently to ensure his familiarity with his people.”
Why relevant

Hieun Tsang's account of law, order and administrative practices suggests formal mechanisms and records existed in the period.

How to extend

Combine this with knowledge of documentary/financial practices to see if 'hundi' fits better as an administrative/feudal order or as a financial instrument circulating under such administrative order.

Pattern takeaway: UPSC frequently tests historical terms that have modern parallels (Hundi -> Cheque/Draft). The specific period mentioned ('post-Harsha') is often just context for when the term became prominent, not a trap to exclude the general definition.
How you should have studied
  1. [THE VERDICT]: Sitter. Directly covered in TN Class XI History (Ch 16) and Nitin Singhania (Ch 7). It is a fundamental term in Indian economic history.
  2. [THE CONCEPTUAL TRIGGER]: Medieval Economy > Trade and Commerce > Financial Instruments & Banking Systems.
  3. [THE HORIZONTAL EXPANSION]: Memorize related economic terms: 'Shroff' (Money changer), 'Sarthavaha' (Caravan leader), 'Shresthi' (Merchant/Banker), 'Manigramam/Nanadesi' (South Indian Guilds), 'Dadni' (Advance payment system), and 'Banjara' (Trading community).
  4. [THE STRATEGIC METACOGNITION]: Create a dedicated 'Glossary of Historical Terms' specifically for Administration and Economy (e.g., taxes, land grants, officials, financial instruments). UPSC asks 1-2 such definition questions every year.
Concept hooks from this question
📌 Adjacent topic to master
S1
👉 Mantri Parishad (Council of Ministers) and royal advice
💡 The insight

The concept of a ministerial council explains how kings received advice and how advisory communications operated in the post-Harsha polity.

High-yield for UPSC because many questions ask about administrative mechanisms and the distinction between royal advice and orders; understanding the council clarifies whether terms implying 'advice' fit the political practice. It links polity, political history, and source interpretation and helps answer questions on decision-making and delegation in medieval India.

📚 Reading List :
  • History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > Council of Ministers > p. 108
  • History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > Pushyabhutis 8.1 > p. 105
🔗 Anchor: "In Indian history sources of the post-Harsha period, was "Hundi" an advisory iss..."
📌 Adjacent topic to master
S1
👉 Epigraphical and inscriptional records as primary sources
💡 The insight

Inscriptions and other epigraphical records are the main documentary bases for reconstructing post-Harsha institutions and terminology.

Essential for UPSC aspirants because source-based questions require judging meanings of historical terms using inscriptions and epigraphs; mastering this helps evaluate claims about administrative instruments or financial instruments in medieval India. It connects history methodology with political and economic history.

📚 Reading List :
  • History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > II. Write Brief Answers > p. 115
  • History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > Pulikesin II, the Chalukya King > p. 106
🔗 Anchor: "In Indian history sources of the post-Harsha period, was "Hundi" an advisory iss..."
📌 Adjacent topic to master
S2
👉 Hundi as a bill of exchange
💡 The insight

Hundi was a medieval financial instrument used in trade and credit, not a daily diary.

High-yield for economic and medieval history questions: recognizing hundi as a precursor to modern bills of exchange and banking clarifies trade-credit mechanisms, helps link commercial institutions to political and social changes, and is often tested in questions on medieval economy.

📚 Reading List :
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > HUNDI > p. 194
🔗 Anchor: "In Indian history sources of the post-Harsha period, was "Hundi" a diary to be m..."
📌 Adjacent topic to master
S2
👉 Kinds of historical sources (literary, epigraphical, archaeological)
💡 The insight

Understanding the categories of sources used for post-Harsha period study helps locate where references to financial instruments like hundi would appear.

Mastering source types is essential for source-based questions and historiography topics; it allows candidates to evaluate evidence reliability, contextualize documents and inscriptions, and infer where economic instruments would be recorded.

📚 Reading List :
  • History , class XI (Tamilnadu state board 2024 ed.) > Chapter 12: Bahmani and Vijayanagar Kingdoms > Sources > p. 176
  • History , class XI (Tamilnadu state board 2024 ed.) > Chapter 8: Harsha and Rise of Regional Kingdoms > II. Write Brief Answers > p. 115
🔗 Anchor: "In Indian history sources of the post-Harsha period, was "Hundi" a diary to be m..."
📌 Adjacent topic to master
S2
👉 Medieval Indian commercial and credit practices
💡 The insight

Medieval trade and credit systems explain the practical role and usage of hundis in market transactions across regions.

Understanding commercial mechanisms enables answers on economic structures, regional trade networks, and evolution of banking; it links to syllabus areas on economic history, urbanization, and administrative practices.

📚 Reading List :
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > HUNDI > p. 194
  • History , class XI (Tamilnadu state board 2024 ed.) > Chapter 12: Bahmani and Vijayanagar Kingdoms > Sources > p. 176
🔗 Anchor: "In Indian history sources of the post-Harsha period, was "Hundi" a diary to be m..."
📌 Adjacent topic to master
S3
👉 Hundi as a bill of exchange
💡 The insight

Hundi functioned as a transferable written instrument instructing payment, equivalent to a bill of exchange.

High-yield for medieval Indian economic history: helps answer questions on credit instruments, commercial practices, and evolution of banking. Connects to topics on merchant networks and monetary instruments enabling long-distance trade.

📚 Reading List :
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > HUNDI > p. 194
  • History , class XI (Tamilnadu state board 2024 ed.) > Chapter 16: The Coming of the Europeans > Banking and Rise of Merchant Capitalists > p. 247
🔗 Anchor: "In Indian history sources of the post-Harsha period, was "Hundi" a bill of excha..."
📌 Adjacent topic to master
S3
👉 Long-distance fund transfer via hundis
💡 The insight

Hundi enabled merchants to move value across political boundaries without carrying currency.

Important for questions on trade infrastructure and merchant capital; links to topics on risks of transporting coinage, discounting, and the growth of merchant communities and financial intermediaries.

📚 Reading List :
  • History , class XI (Tamilnadu state board 2024 ed.) > Chapter 16: The Coming of the Europeans > Banking and Rise of Merchant Capitalists > p. 247
  • Exploring Society:India and Beyond ,Social Science, Class VIII . NCERT(Revised ed 2025) > Chapter 2: Reshaping India’s Political Map > DON'T MISS OUT > p. 57
🔗 Anchor: "In Indian history sources of the post-Harsha period, was "Hundi" a bill of excha..."
🌑 The Hidden Trap

Since Hundi is asked, look out for 'Nivi-dharma' (land tenure system regarding perpetual endowment) or 'Akshaya-nivi' (perpetual fund) in Ancient India. Also, distinguish between 'Darshani Hundi' (payable on sight) and 'Muddati Hundi' (payable after a period).

⚡ Elimination Cheat Code

Linguistic/Contextual Hack: The word 'Hundi' is still used in Indian business vernacular (and news regarding Hawala rackets) to mean money transfer. Options A, B, and D are administrative/political (Advisory, Diary, Order). Option C is the only 'Financial/Economic' option. If you know Hundi = Money, C is the only logical choice.

🔗 Mains Connection

Links to GS-3 (Money & Banking): Hundi is an indigenous 'Negotiable Instrument'. It connects to the modern problem of 'Hawala' transactions and the informal money market, showing the historical roots of non-institutional banking in India.

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