The Reserve Bank of India (RBI) has directed commercial banks to open branches in areas that have a population of more than 5,000 but don't have a bank branch.

The RBI has identified 1,600 such panchayats in Bihar where bank branches would be set up by March 31, 2017.

The move aims to take banking facilities nearer to the population hitherto not enjoying its benefits and also to check influence of non-banking finance companies (NBFCs) in the state.

Payment banks and small finance banks would be set up for lending loans to its customers in uncovered panchayats. Payment banks launched in August last year have limited banking services, for instance, they can accept deposits, offer payments and remittance services but can't give loans. Small finance banks offer loans to people mainly belonging from the lower income group such as farmers, small businessmen and traders.

M.K. Verma, regional director, Reserve Bank of India (Bihar-Jharkhand), said: "The RBI has directed different banks to open branches to enhance banking penetration and to check people falling in the hands of NBFCs."

The RBI direction to open banks branches also assume importance as banking penetration in Bihar is less as compared to other states and even the national average. Nationwide, there is one bank branch for a population of 11,000, but in case of Bihar, the figure is one branch for 17,000 people. Sources said out of 8,471 panchayats in the state, around 5,200 panchayats don't have bank branches.

Also, at the state level co-ordination committee meet held on Wednesday and being attended by RBI and other financial regulators such as Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, along with state government officials, including chief secretary Anjani Kumar Singh, several decisions were taken to enhance banking penetration and to keep a tab of NBFCs.