Hundís

Hundís (plural of hundi) are traditional negotiable instruments historically used in the Indian subcontinent to transfer funds and settle debts. They function as a form of promissory note or bill of exchange and were issued by merchants, moneylenders, or banking agents to facilitate trade and credit over long distances.

In practice, a hundi is drawn by a drawer in favor of a payee, promising payment of a specified amount either on demand or at a future date. The instrument could be negotiated or endorsed to third parties, enabling funds to move without the physical transfer of cash. In many contexts, hundís operated within informal or semi-formal networks that included merchants, money changers, and commission agents, sometimes overlapping with what is colloquially described as hawala or other remittance systems.

Historically, hundís played a central role in commerce across parts of the Indian subcontinent, including present-day India, Pakistan, Bangladesh, and Sri Lanka. They supported long-distance trading, grain and textile markets, and regional credit arrangements before the expansion of formal banking networks. The practice contributed to the development of early credit mechanisms and influenced later financial instruments.

Today, the use of hundís has declined in formal economies due to regulation, the expansion of standard banking instruments, and anti-money-laundering controls. In many jurisdictions they operate in the informal sector and may be regulated or restricted under financial laws. While less common in mainstream finance, hundís and related informal credit networks can still appear in regional remittance and informal trade contexts.