They can't deny loan on this reason.you can complain to banking ombudsman for said illegality 

You can first transfer the property on your brother's name and later on your brother can perform mortgage loan on the same property. After that your brother can pay you the money.

Approach cooperative banks for home loan 

they may sanction home loan 

there is no legal bar for purchase of property from family member 

Dear client,  

I understand your frustration in this situation. It's not uncommon for lenders to be cautious about lending for transactions between family members, as they may be concerned about the possibility of fraud or disputes over the terms of the sale. However, it's important to note that such transactions are not necessarily illegal, and it's possible to find lenders who are willing to work with you.

Here are a few suggestions on how you could proceed:

Look for lenders who specialize in providing loans for family transactions. Some banks and NBFCs may have specific loan products designed for family transactions, which may be more flexible than their standard products. You could also consider looking into specialized lenders who focus on providing loans for real estate transactions.

Provide documentation to support the sale. If the lenders are concerned about the validity of the sale, providing documentation such as the sale agreement and registered sale deed can help demonstrate that the sale is genuine and above board. You may also want to consider obtaining an independent valuation of the property to provide further reassurance to the lenders.

Consider alternative financing options. If you are unable to find a lender who is willing to provide a home loan for the transaction, you could consider alternative financing options such as a personal loan, a loan against your own assets, or borrowing from friends or family.

Seek the advice of a financial advisor or real estate expert. A professional advisor may be able to provide additional guidance on the best financing options for your specific situation, as well as help you navigate the legal and tax implications of the transaction.

It's important to remember that each lender has its own criteria for evaluating loan applications, and what works with one lender may not work with another. With persistence and the right approach, however, it's likely that you'll be able to find a lender who is willing to work with you on this transaction.

The bank cannot refuse to grant loan for the property being sold from one family member to another.

There is no embargo or impediment in a brother selling his property to his another brother.

If this bank is not inclined to grant home loan, you cannot put pressure on them because banks are at liberty to refuse loan if they are not satisfied with the process or having any doubt over the title to property despite the legal opinion from panel lawyer recommending loan.

Therefore he can approach any other bank who are ready to offer the loan.

There is no question of getting frustrated over this issue.

There is no provision to sue the bank or NBFC if they decline to offer the loan for the reasons they may rely upon, however you can make a complaint agaisnt the bank which is refusing to entertain the application for loan with the banking ombudsman or to the higher authorities of the said bank.

Take loan on property on your name ...then transfer pty along with loan