A 'hundi' can be best described as _________________.

Both 1 and 2

The correct answer is Option 4: Both 1 and 2

NCERT: "Recent historical research has also highlighted the extensive and sophisticated trading networks that existed in pre-colonial India. Of course, we know that for centuries India was a major manufacturer and exporter of handloom cloth (both ordinary cotton and luxury silks), as well as the source of many other goods (such as spices) that were in great demand in the global market, especially in Europe. So it is not surprising that pre colonial India had well-organised manufacturing centres as well as indigenous merchant groups, trading networks, and banking systems that enabled trade to take place within India, and between India and the rest of the world. These traditional trading communities or castes had their own systems of banking and credit. For instance, an important instrument of exchange and credit was the hundi, or bill of exchange (like a credit note), which allowed merchants to engage in long-distance trade. Because trade took place primarily within the caste and kinship networks of these communities, a merchant in one part of the country could issue a hundi that would be honoured by a merchant in another place"