Banking and monetary regulator Reserve Bank of India has asked for more branches to be set up by banks in rural areas where banking facilities are yet to set foot.

As part of the financial inclusion drive, the apex bank has sought for 25% more branches from banks to be set in these unbanked areas of the country.

The RBI has already given permission to banks to set up branches in Tier III to Tier VI areas without getting prior approval from it.

However approval is needed for opening branches in Tier I and Tier II cities except for north eastern states and Sikkim.

The central bank says that approval for branches in these cities would now be dependant on the fact that whether 25% of these branches are opened in unbanked areas or not.