Can civil court try a suit filed by a bank against a borrower?

Hi Team, Just wanted to know whether a bank or financial institution can approve the personal loan even after examining the Bank Statements of the borrower that shows actual salary and the EMIs being paid from the same account even if the total EMIs surpasses the salary received. If approved, and eventually if the borrower unable to pay due to his financial situation and other EMI or Credit Card commitments the newly approved Personal Loan EMI or Credit Card due. Was it legal to sue the borrower for this as the basic verification from the bank or financial institution is not done on the borrower's statement of account, pay slips shared, etc. I am raising this question because I am in this situation now due to some expenses I met on family emergency in 2018 and 2020.