Spreading banking services is a key part of the government's new cash transfer programme, that sees welfare beneficiaries receiving direct payments instead of subsidised products in an attempt to minimise corruption by middlemen and waste.
"The public-sector banks will open 10,000 branches this year.
Out of these 2,000 will be regional rural banks," Finance Minister P. Chidambaram told a news conference.
"The banking system should be the strongest pillar of the direct benefits transfer (scheme). For every beneficiary there should be a bank account," he added, saying 50,000 new state banking jobs would be created this year.
In January the government rolled out the Direct Benefits Transfer scheme which aims to distribute as much as possible of India's $61 billion welfare budget in cash instead of distributing subsidised products such as gas or kerosene.
Welfare schemes such as scholarships for education and old-age pension benefits are also switching over to the new system.