Increasing number of fraud and theft cases has been a concern for banks since quite some time especially at a time when they are harboring plans to penetrate into the unbanked parts of the country as a part of financial inclusion.

"There is a proposal that bank branches should only be opened in government offices or near to police stations," said an official of the Indian Bank Association (IBA).

There has been as much as Rs 1000 crore worth loss on the part of banks owing to antisocial activities like dacoities, robberies and theft in the past six months.

"Banks will be wary of lending, opening branches in remote areas," said a senior finance ministry official.

As concern over the issue, RBI has directed the regional directors of banks to hold state-level security committee meetings with the state police officials.

"We have to open branches to pursue the government's agenda but security issues still remains a concern," said a senior official with a east-based public sector bank.