LLOYDS TSB loaned a couple on benefits £20,000 even though they could not afford to repay the money, it was revealed today.
The group admitted its actions broke the Banking Code, the rules governing the behaviour of banks, according to BBC documentary The Real Story.
The programme is due to be broadcast on BBC 1 at 7.30pm tonight.
It was alleged that a large proportion of the money borrowed was to cover loan insurance to protect the couple if they lost their jobs - even though neither was in work at the time.
In another case followed by the programme, a blind man claimed he was encouraged to take out a loan with insurance, which he "did not really need" as he was unemployed.
Lloyds TSB later repaid £6,000 racked up in payment protection insurance and interest by the man.
Both cases occurred at one branch of the bank in Burton-on-Trent.
Iain Macqueen-Sims, an independent consumer loans expert, told the programme: "You would expect this sort of behaviour from a cowboy, from a back street broker or a loan shark. One would not expect this from a major high street bank."
The programme said the bank's director of policy co-ordination and risk, John Spence, admitted that Lloyds TSB broke the code.