The Mithai panchayat, which is about 6 km from here, has also banned playing or exhibiting obscene songs/films with provision of penalty upto Rs 5000, its mukhiya (village head) Madhumala said.
"We were forced to take this decision as villagers mostly women were frequent victim to cases of fight among tipplers and also loss of lives due to drinking," Madhumala told PTI.
On an average 15 people die each year due to excessive liquor consumption, she said.
The decision, taken a fortnight ago after a meeting of the panchayat, was a result of initiative taken by Madhumala and her husband and social worker Devraj.
The panchayat decided to impose a penalty of Rs 5001 on people found violating the ban on liquor consumption and gambling and Rs 501 for playing obscene music or exhibiting an obscene film, Madhumala said.
"The decision is yielding positive results," she added.
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The Mithai panchayat, which is the oldest in Madhepura district, is enroute to Saharsa and has a population of over 25,000. A Railways engine factory is coming up near it.
Madhepura Sub-Divisional Police Officer Sanjay Kumar Nirala hailed the decision and assured all assistance to the panchayat for stringent enforcement of the order.