what is hundiand its types and explain all types
Answers
Explanation:
A Hundi is a negotiable instrument written in an oriental (vernacular) 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. ... It means that Hundis were used as means of collection of debts.History
Hundis have a very long historical background in India. The existence of hundis belongs from the sixteenth century. Written documents are proof to it. The merchant Ram Kishan, born in 1586, receives a hundi of Rs.200 from his father to allow him to borrow money to start the trade.
Hundi
During the colonial, the hundi system was indigenous or traditional for the British Government. They were reluctant to interfere with it as it was an essential part of the Indian economy. Moreover, they put the tax on the transaction taking place from the system.
Official hundi forms were produced putting revenue stamps bearing the image of British monarchs like Queen Victoria. Courts were the source of dispute solution in case of conflicts between the merchants. Hence, it was not at all an underground means of trade though it was taking place without banks.
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.
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Answer:
Hundis are financial instruments which are used in the India for trade and credit transactions. They have been used for the purposes of: transferring funds from one place to another as remittance instruments; for borrowing money as credit instruments; as bills of exchange for trade transactions.
It was further held that there are three types of hundi which are darshani hundi that are payable on sight, muddati hundi that are paid after a specified time and shah jog hundi which are paid only to a person who has respectable standing .
Explanation:
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