Credit officers would be well advised to read the business plans supplied by applicants for loans, something ANZ failed to do with a gelato franchise, evidence at the Hayne royal commission confirms.Kate Gibson, ANZ's general manager for small business banking, yesterday responded to the most humorous case study yet at the Royal Commission into banking misconduct - the tale of a novice business owner opening what was described as both a shop and a kiosk in a Westfield mall."Do you expect your ANZ bankers to read the business plan," Michael Hodge, counsel assisting the commission asked Gibson."Yes, I would," Gibson conceded." And in this case, there's no record of that having been done?""No, there's not." "And do you think, having not done that, that raises a question about whether or not [ANZ] acted as a diligent and prudent banker?""There's no notes as to whether the conversation occurred, but I don't know whether the conversation occurred or not."Using the case study to explore themes of responsible business lending, Hodge put it to Gibson that "I'm interested in exploring with you is the level of responsibility as between the borrower and the banker?""I think it is shared. And I think that because it is - it is important that the banker forms an opinion as to the reasonableness of the cash flow forecasts. And whether the customers have understood the business that they're getting into, and, who the target market are, is part of that [credit assessment]. I suppose," Gibson said.As with rival banks, ANZ has a taste for lending to franchises, drawing on data from the master franchisor, among other sources, to inform credit decisions."This could be projections based on cash flows [at gelato stores] in other countries?" Hodge asserted.Gibson suggested that there was "a number of ways it could have been done. "It could have been a cash flow from another country. It could have been a model where they looked at the volume of ice creams and other products sold in the New Zealand stores and reset those price points to the Australian market. "We don't know, because the assumptions are not spelt out," she said."And would you expect those assumptions to be spelt out for the bank?" Hodge asked."Ideally, yes, they would have been," Gibson agreed.Gibson slotted in a contrary view to the rigid approach of Hodge."You run the risk that, if you have a very prescriptive, mandatory requirement, that people who can't meet that, then can't access lending - or may just make the numbers up."