New Delhi, March 16 (IANS) New banks can now open in rural areas with a population of over 2,000, Minister of State for Finance Namo Narain Meena said Tuesday.

'To reach the benefits of banking services to the hinterland, it has been proposed to provide appropriate banking facilities to habitations having population in excess of 2000 by March 2012. These services will be provided by banks to cover around 60,000 habitations,' Meena told the Rajya Sabha.

The minister said low population density, inhospitable terrain, law and order problems and non-availability of basic infrastructure were some of the bottlenecks in providing banking facilities in these areas.

The Reserve Bank of India has allowed scheduled commercial banks (other than Regional Rural Banks) to open branches without permission in areas of at least 49,999 people.

Currently, there are 96 scheduled commercial banks - 27 public sector, 31 private and 38 foreign banks - with a combined network of over 53,000 branches. Of this, public sector banks account for over 75 percent.