Explanation

In ancient and medieval Indian commercial history, a Hundi was an indigenous credit and remittance instrument that functioned as a bill of exchange:

– It constituted an unconditional written financial contract drawn by one merchant or banker directing another party to pay a specified sum of money to a designated payee at a future date or on demand.
– Hundis facilitated long-distance inland trade without the physical hazard of transporting metallic currency across provinces, serving as remittance instruments, short-term credit mechanisms, and promissory discount bills.

Therefore, the nature of a Hundi is a bill of exchange — Option C.