Q. The term “hundis” is related to which of the following?

[A] Cotton manufacture

[B] Jute production

[C] Bills of exchange

[D] Revenue collection

Answer: C

Explanation: 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.

Source: Tamil Nadu NCERT