Gift deed of a house which has loan on it

You are absolutely right, your brother can execute a gift deed and transfer his share in your favour only and only after redemption of loan and taking a NOC from financier.

1. Please check the loan agreement you both signed with the bank on "transfer of the property under loan" clauses. if there is no clause that is stopping u from transfer then, 

1 a. ) Check the EC of the property if the loan mortagage is reflected in the EC, if not then you can go ahead with gift deed.

1 b.) If EC reflects mortagage or in any case as  as you want a cleaner approach do this, make a notarised gift agreement and both brothers visit the bank show this notarised gift agreement let the bank's legal team guide you further. 

As there's a mortgage loan pending repayment on both the names, none of you both have title to the property until the loan is fully discharged.

Hence you will be advised by the bank to clear the loan first and then proceed with desired transaction in the property as proposed.

No, mortgaged property can't be transferred by way of gift until and unless entire loan amount alongwith interest is paid and NOC in this regard is obtained by Bank.

To my knowledge and understanding, in the given facts, the gift deed could be executed unless there are conditions to the contrary in the sale deed.