UPSC Prelims 2020— Question 45

This question tests hundi and indigenous banking. The key concept is: A hundi was a traditional negotiable instrument resembling a bill of exchange or remittance instrument. It facilitated trade and credit across long distances without requiring merchants to carry large quantities of coin. It was not a royal advisory, daily diary or feudal order. The verified answer for the uploaded Set-B paper is option C. Option A — An advisory issued by the king to his subordinates: This is not the correct option. The option does not match the verified combination or conclusion. The decisive point is the distinction explained above: A hundi was a traditional negotiable instrument resembling a bill of exchange or remittance instrument. It facilitated trade and credit across long distances without requiring merchants to carry large quantities of coin. It was not a royal advisory, daily diary or feudal order. Therefore this alternative should be eliminated even if part of its wording appears plausible in isolation. Option B — A dairy to be maintained for daily accounts: This is not the correct option. The option does not match the verified combination or conclusion. The decisive point is the distinction explained above: A hundi was a traditional negotiable instrument resembling a bill of exchange or remittance instrument. It facilitated trade and credit across long distances without requiring merchants to carry large quantities of coin. It was not a royal advisory, daily diary or feudal order. Therefore this alternative should be eliminated even if part of its wording appears plausible in isolation. Option C — A bill of Exchange: This is the correct option. It matches the verified conclusion because A hundi was a traditional negotiable instrument resembling a bill of exchange or remittance instrument. It facilitated trade and credit across long distances without requiring merchants to carry large quantities of coin. It was not a royal advisory, daily diary or feudal order. The wording of the option is consistent with the governing concept tested by the question. Option D — An order from the feudal lord to his subordinates: This is not the correct option. The option does not match the verified combination or conclusion. The decisive point is the distinction explained above: A hundi was a traditional negotiable instrument resembling a bill of exchange or remittance instrument. It facilitated trade and credit across long distances without requiring merchants to carry large quantities of coin. It was not a royal advisory, daily diary or feudal order. Therefore this alternative should be eliminated even if part of its wording appears plausible in isolation. For UPSC-style elimination, first identify the exact proposition being tested, then evaluate each statement independently before comparing the answer codes. Avoid treating a broad or absolute statement as correct merely because its general theme is familiar. The precise qualifiers in the question—such as 'all', 'only', 'cannot', 'largest', 'always' or a specific institutional role—often determine the answer. On that basis, option C is the verified answer.