Bank's Role In Protecting Funds Of A Deceased Customer For His/her Legal Heir(s)

Can a bank give/proceed/pass out funds from a deceased customer's savings account to a non-banking financial company in lieu of a loan availed by the deceased and when his/her account is frozen upon the request of his/her legal heirs. Apart from this, the NBFC (non banking financial company) mentioned earlier has withdrawn 5 Equated monthly installments in one month from the deceased person's frozen account where a deceased claim settlement is going on to give the funds to his /her legal heirs. Is the above mentioned bank at fault. If it is what can be done further with the bank legally. Can the bank be asked to compensate that amount?