New Delhi, June 25 -- The Union finance ministry has asked public sector banks (PSBs) to accelerate their rural expansion and ensure access in villages with a population of more than 3,000, according to two people aware of the development.

The government's push to strengthen state-owned lenders' rural presence and protect their customer base comes as private banks, small finance banks, and digital financial service providers steadily expand beyond urban markets.

The focus is on ensuring larger rural habitations remain adequately served by bank branches, which continue to play a critical role in deposit mobilization, lending, and the implementation of government welfare programmes, said one of the two persons cited above.

"As part of th...