Question

What is Hundi and write its classification​

Answer 1

Answer:

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Explanation:

Hundi/Hundee is a financial instrument that developed in Medieval India for use in trade and credit transactions. Hundis are used as a form of remittance instrument to transfer money from place to place, as a form of credit instrument or IOU to borrow money and as a bill of exchange in trade transactions.

Answer 2

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According to an age-old tradition of business transactions in India, Hundi is a negotiable instrument which is available in various vernacular languages in the country. This word has come out from the Sanskrit word ‘hundi’ which means ‘to collect’. They are somehow related to the bills of exchange. But from the shape and content, they look like promissory notes.A hundi is a negotiable instrument. But it is not necessary to be a bill of exchange as given in the Act. Hundis are famous among Indian traders. Specifically, it is famous amongst those operating in suburban areas. These are under control of the Negotiable Instrument Act,1881 unless there is a local usage to the contrary.Types of Hundis

1. Darshani

Darshani is a hundi which is payable at sight. It is like a demand bill. Moreover, it is negotiable. The party can sell them at par, premium, and discount. The holder has to present the darshani for payment within a reasonable time of its receipt. If the drawer faces any loss due to delay in presentation, the holder shall be responsible for it.

2. Miadi

Also called as muddati, miadi is something which is payable after a certain time period like a ‘time bill’. Banks generally provide loans for the security of such hundis.

3. Shahjog

This is a hundi made payable only to a Shah (a respectable person of financial worth and substance in the market). It is freely transferrable. But it is not payable to bearer. In general, it is similar to a crossed cheque.

4. Namjog

Under this hundi, the amount is payable to the party whose name is on it. Such an instrument is similar to a bill of exchange payable on order.

5. Dhanijog

‘Dhani’ in local terms means owner. It is generally like a bearer cheque as the holder of it becomes a holder in due course if he takes it for value.