"Typically in my experience as a banker you don't just look at one document you look at the whole range of documents," Mr Welsh replied.

The bank loaned Ms Flanagan's daughter and her partner $160,000 despite the franchise only costing $85,000. Mr Hodge also zeroed in on the lack of information about the loan's purpose which it was revealed would include two new cars.

"I am just trying to assess when Westpac comes to assess a business loan is it not important to assess what the loan is for with some precision?" Mr Hodge asked.

Mr Welsh responded by saying he was not an expert in pool businesses and after applying a reasonableness test $160,000 for a pool franchise sounded appropriate.

Carolyn Flanagan, who suffers from a range of chronic ailments, appearing at the royal commission via videolink on Monday. Internet

Mr Welsh acknowledged there was no loan-to-valuation (LVR) ratio for the franchise business for which it provided a loan but admitted there was an LVR noted for the home used by the guarantor to secure the loan.

The examination of Westpac's processes follows yesterday's hearing where Ms Flanagan appeared via video link to explain how her home came to be acquired by the bank following her decision to act as guarantor for her daughter.

The royal commission has flagged via the publication of a daily witness list that after Mr Welsh completes his time in the witness box it will introduce a new case study involving ANZ where the bank's general manager of small business Kate Gibson will appear.

Westpac's Mr Welsh is expected to be called back to the box for a second stint after which we will hear from Westpac's head of performance and rewards Carol Separovich. The hearings are taking place at the Commonwealth Courts building on William St in Melbourne.