Thousands of people apply for loans every day. And however eager a bank is to complete its targets, every loan is a risk. So, it is only natural that it confirms or validates the details you provide. The bank checks all your information including your existing residential address, your place of employment, employer credentials (if you work for a small organization), residence and work telephone numbers. Representatives are sent to your workplace or residence to verify the details.
Even the references you have provided in the application form are checked out. CIBIL is used for credential check or Banks are forced to undertake validation in the absence of any credit bureau. Once your credentials are validated, it helps establish trust between you and the bank.