We have loan where the applicant made application and was approved a year ago but we have not given the money to the customer yet because they not requested it. We sent him a letter requesting him to withdraw his loan. buthe does not want to do this. Is there any thing the bank can do to close out this loan application or do we have to keep it open.

Did you provide him a written commitment with an expiration date? If so rely on the expiration date. If you sent a commitment letter with no expiration date (not a good thing to do) then you have an open commitment.

If only a verbal commitment was given - then I would send a letter advising the applicant that he has X number of days to accept the commitment otherwise the commitment will be voided.

Unless you have signed loan documents, it sounds to me like you don't have a loan...you have an approved but not accepted application. Your approval letter should always have an expiration date on it. In this case, I believe you could send the applicant a letter stating that if no action is taken by x date (2 weeks out?) you will close the file.

I agree with TR above. Two weeks is ample time.