Is banking sector necessary in rural areas? If yes, why?

of course yes, as all payment in the future will be through banking sector even in the rural & remote areas this direction will be supported by all governments, companies, organizations ...etc. as this way are more easy, secured & can be analysed for business developement 

Yes, it is very much necessary.

1. Security being the primary issue, Bank will give people opportunity to securely deal with finance without being worried about outside disturbances(stealing,robbery,anti-social activities,etc).

2. Provide opportunities to people for taking up loan at a lower rate of interest than a private individual thus promoting growth and resulting in timely return of the loaned money.

3. Proper organisation of financial resources for people and reduce necessity of carrying cash.

4. Provide opportunity to the government to perform income tax surveys at ease and take necessary action so that defaulter taxpayers pay there tax.

5. Easy transfer of money from distant location.