1)-Its a self earned property .....why kids have share in this ? As we have heard kids have no rights in self earned properties.
It is a self acquired property of the deceased owner and not the wife of the deceased, therefore upon iontestate death of the deceased property owner, his legal heirs or successors in interest are lawfully entitled to a legitimate share inthe property.
2)- Now as u suggest need to make an affidavit to attach with gift deed ....will bank allow this as completing the chain.
The bank will not accept the affidavit because it is not a registered document.
At this juncture, a ratification deed relinquishing their rights and ratifying the execution of the registered gift deed by their mother can be executed and registered by the children of the deceased property owner to make the formality to be completed in all aspects to the satisfaction of the bank.
3)-or as u suggest to make gift deed again ....but now flat is on sister's name ....how it can be done again on their mothers name ?
No other option is viable or acceptable as per law at this stage.
You may consult a local advocate and discuss on this issue and decide further course of legal action on it.