Banks Cannot Penalise Borrowers for Switching Lenders or Prepaying Loans: Orissa High Court

Title: Banking Regulation under Sections 21 and 35A, Banking Regulation Act, 1949 with comments on unlawful foreclosure charges and borrower mobility rights Introduction The Orissa High Court has delivered a significant judgment protecting borrowers—especially MSMEs—from unfair banking practices that restrict their right to switch lenders. The Court ruled that banks cannot impose charges that effectively penalize borrowers for closing loans early or refinancing with other institutions, as such practices violate…