The Jain Oswal Bania Hiranand Shah established what became the House of Jagat Seth after moving from Nagaur (Rajasthan) to Patna, laying foundations for a major mercantile-banking network that used instruments such as hundis for remittance and credit.
Manik Chand (of the Jagat Seth house) financially supported Prince Farrukhsiyar’s bid for the Mughal throne; after Farrukhsiyar became emperor, he conferred the honorific Jagat Seth (“banker/merchant of the world”), reflecting the growing political-financial role of large indigenous banking firms.
Colonial-era provincial stamp regulations (notably in Bengal) sought to bring indigenous bills of exchange (hundis) into the stamp-duty net, highlighting the state’s effort to tax and standardize documentary credit used in long-distance trade.
The Indian Stamp Act, 1879 (Act No. 1 of 1879) was enacted to consolidate and amend stamp law across British India, setting the stage for systematic taxation of commercial instruments, including bills of exchange practices that intersected with hundi usage.
The Indian Stamp Act, 1879 entered into force, operationalizing stamp duties on instruments used in commerce and credit—an important lever through which colonial administration shaped documentation and enforceability of exchange instruments used by merchants and bankers.
The Negotiable Instruments Act, 1881 was enacted to define and amend the law relating to promissory notes, bills of exchange, and cheques. The Act is notable for its interaction with indigenous mercantile custom, including the continued recognition of local usage relating to instruments in “oriental” languages (often the practical context for hundis).
The Negotiable Instruments Act, 1881 came into effect, providing a statutory framework for negotiable instruments while leaving room for mercantile custom—important because hundi practices often depended on customary rules regarding endorsement, presentation, and identification of payees.
The Indian Stamp Act, 1899 (Act No. 2 of 1899) was enacted to consolidate and amend stamp law, replacing earlier arrangements. Stamp duty remained central to how documentary credit and exchange instruments (including those styled as hundis) were formalized for evidentiary and fiscal purposes.
The Indian Stamp Act, 1899 came into force, consolidating the stamp-duty regime that materially affected the circulation and enforceability of written instruments used in trade finance and credit networks, including bills of exchange practices aligned with hundi usage.
The Indian Stamp Rules, 1925 provided operational rules for stamping promissory notes and bills of exchange, explicitly referencing stamped paper “with or without the word ‘hundi’,” evidence of continued administrative accommodation of indigenous bill-of-exchange practice within stamp procedures.
In the early 1930s, systematic inquiries into Indian banking and finance (around the period of the Indian Central Banking Inquiry Committee) reflected continued attention to indigenous credit and remittance mechanisms. Scholarly discussion highlights that hundis remained widely used among merchants even as modern banking expanded.
Legal commentary and case citations collected in standard presentations of the Negotiable Instruments Act discuss Shah Jog hundis as a commonly used form that had been treated as neither a bill of exchange nor a promissory note in certain holdings, illustrating how indigenous forms could diverge from English-law categories (e.g., payability to a “shah” rather than a named person or bearer).
Hundi credit networks and bill-of-exchange practices in South Asia (17th–19th centuries)
