1. Sir, in my opinion, the retired bank officer can take help to defend his actions on following points, if applicable in his case:-
(a) That ( whether the defaulter has paid any installments, if any, has not been disclosed. Presuming that the default has occurred after payment of some installments) after sanction of the loan, the defaulter has paid so much installments. If he has become defaulter later on, then the loan sanctioning authority is not responsible.
(b) Since the sanctioning officer has retired since few years ( since how many years he retired has not been disclosed), hence the departmental action at this stage is time-barred. On this point help can be sought from the terms and conditions of employment (just like in respect of Central Govt. Employees where it is laid down that in respect of retired central govt. employees no departmental action can be taken after elapse of some specified time without the approval of Hon'ble President/Competent Authority).
(b) That the departmental action has not been taken against those junior officers(if there are any), who investigated the case for sanction of loan and made recommendations for sanction of said loan to the said retired Officer.
(e) That the loan was sanctioned strictly in accordance with the instructions of the bank as existed at the time sanction of said loan. In this connection, the said retired officer has to examine the instructions on the subject as were applicable at that time.
2. Further my above points are merely on presumptions and, in my opinion, every think will depend upon the facts of the case and what charges are leveled against the said retired bank officer.