We Indian generally give priority to relationships then to money. Lending money across family, helping each other financially in needy time is very concepts in Indian family.
I personally also know of some incidents where senior family member will act as a guarantor for loan of the other guarantor. When I read the article on rediff on same concept, then I realized that becoming guarantor can be a risk.
It explains how banks will ask of guarantor when they think that person seeking loan might not be capable of paying it back. In that case, guarantor is legally bound to make payments in case original borrower defaults his/her payment.
So, though it’s good to help others in time of need, but please double check before becoming someone's loan guarantor.