RBI has set some guidelines.
1.The bank which has declined your loan application is under obligation to supply you the reason for declining in writing. This bank has to supply you certified copy of your loan application also. If the BM denies you may remind him that you can approach RBI. Submit a letter with your demand and obtain acknowledgment. You can issue a notice/legal notice.
From this bank has you shall come to know the details of the bank which has declared you a defaulter.
2. You are within your rights to obtain your credit report maintained with credit rating agency (ies). RBI has allowed banks to charge a fee not exceeding Rs.50/. You may enquire the fee from bank, and pay by cheque along with a letter asking for credit report from CIBIL by registered post and obtain acknowledgment of letter and cheque from BM of the bank. In your credit report ask specifically from name of the member (bank/NBFC) to be declared which has declared you defaulter. This credit report shall become the basis of your complaint and correction if any.
3. If these banks are adamant you can report the matter to Nodal officer of the bank by email and demand reply with soft copy of the credit report within say 2 days.
You can also use your approach and resources and obtain your report from and finance/loan companies which also have access to credit reports.
4. You can submit a stern letter to local BM of the bank , with a copy to chairman, nodal officer of the bank, which has declared you defaulter to correct the error say within 2 days and supply you a letter admitting error and begging apology at once and corrected CIBIL report within say next 2 days. The offender bank is legal obligation to do so.
You can also approach these officials on phone for faster response. You can issue a notice/legal notice.
5. AS rightly pointed out by Mr. Bhadra you can sue the offender bank thru BO or Consumer Forum but you shall need credit report from CIBIL in which you are declared defaulter.
These banks and concerned officials do not deserve to be pardoned, therefore lodge a complaint with chairman and demand to supply you the name, designation, department, address with pin code, email id, phone number with STD code, mobile number, permanent address of the erring officials.
6. If you apply to CIBIL you have to pay Rs. 450+ and it shall take more time.
RBI website has all circulars on guidelines to the banks.