This refers to ‘Wrong practice’ (February 18). One area where mis-selling is frequently observed is the sale of third-party products such as mutual funds and insurance without adequate assessment of customer suitability. The allocation of sales targets to staff of financial institutions creates additional pressure. When such targets are often linked to revenue and profitability objectives it affects employee morale. There is also a need for the RBI to closely monitor the sale of complex derivative products to industrial houses. At a time when volatility in the foreign exchange market is rising, the sale of derivative products in the name of managing interest rate and exchange rate risks, without clearly explaining the associated risks and conducting proper suitability assessments, can result in significant losses when market conditions turn adverse. As such mis-selling in case of both liability and asset products need to be monitored.

Srinivasan Velamur

Chennai

SB a/c balance

Apropos, ‘Banks must not levy penalty for failure to maintain minimum balance in SB a/cs (February 18). While banks do give different rates of interest on depositors’ money and charge different rates of interest on their loans subject to their credit-deposit ratio or liquidity position, charging penalties on savings account holders for not maintaining minimum balances is unfair. This issue has been rightly identified by the parliamentary committee report which has suggested new guidelines in this matter. Banks have to realise that their business to a large extent is driven by these small savers, who also avail themselves of other types of investment products which bring huge incomes to the banks.

Katuru Durga Prasad Rao

Hyderabad

Fiscal devolution

While the article ‘Finance panels, and needs of local bodies’ (February 18) highlights the importance of fiscal devolution, it overlooks the data deficit and administrative bottlenecks that cripple State Finance Commissions (SFCs). Local bodies often lack standardised, audited accounting systems, making it nearly impossible for panels to accurately assess the vertical and horizontal fiscal gaps.

Furthermore, the non-synchronous cycles between Central and State commissions lead to delayed fund releases.

Strengthening local finances requires not just more grants, but digital infrastructure for revenue collection and a mandatory Action Taken Report (ATR) mechanism to ensure SFC recommendations are actually implemented by State legislatures.

PD Sankaranarayanan

Kumaramputhur, Kerala

Pulses import from US

Apropos ‘Need to import pulses to meet domestic demand’ (February 18). Unless the factsheet of the US trade deal is revealed, farmers will continue to be concerned. Import of pulses from the US must come with quantitative restrictions and right to revision. Also, at no stage should GM pulses slip into Indian shores. Farmers must be encouraged to produce commodities in short supply, including pulses, through incentives. Finally, vast areas of fallow lands must be identified and leased to farmers to cultivate pulses. This will help abate the demand-supply gap as well as offer economic succour to farming communities.

Rajiv Magal

Halekere Village, Karnataka

Published on February 18, 2026