What Is Hundi What Were the Different Types of Hundi Is Use by Traders in Ancient Times?

In ancient times, traders used a unique method to transfer money or credit known as Hundi. It is a type of promissory note used in India and other parts of Asia. The word ‘Hundi’ is derived from the Sanskrit word ‘hund’, which means “to collect”.

What Is Hundi?

A Hundi is a financial instrument that acts as a legal document for transferring funds from one person to another. It is widely used in Asian countries, particularly in India, where it originated. It can be an order to pay or a promise of payment made by one party to another.

Types of Hundi

There are different types of Hundis that were prevalent in ancient times. Here are some of the most common ones:

1. Sahi Hundi

Sahi hundis were widely used for local transactions in ancient times. They were issued by traders and merchants and were payable on demand.

2. Darshani Hundi

Darshani hundis were issued by traders and merchants who had established creditworthiness and reputation in the market. They could be transferred from one party to another, but only after proper scrutiny.

3. Miadi Hundi

Miadi hundis were similar to modern-day cheques, where the issuer promises to pay the recipient on the due date mentioned on the hundi.

4. Jawabee Hundi

Jawabee hundis were issued without any interest component and were payable on demand.

Uses of Hundi by Traders in Ancient Times

Hundis played a vital role in facilitating trade and commerce in ancient times. Traders used them for various purposes like:

  • Credit Transactions: Traders used hundis as a means of extending credit to each other. They would issue hundis to their clients, which could then be used to make payments to other traders.
  • International Trade: Hundis were extensively used for international trade, where merchants from different countries would use them as a means of transferring funds.
  • Funds Transfer: Traders would use hundis to transfer funds from one place to another, without the need for physical transportation of cash or gold.


Hundis played a significant role in the growth and development of trade and commerce in ancient times. While they have been replaced by modern-day financial instruments like cheques and bank transfers, their legacy still lives on. It is fascinating to see how such a simple yet effective method of transferring funds could have such a profound impact on the economy and society as a whole.