I am not a banjo guy, but that sounded pretty high to me. I did a search and based on what I saw, it does seem that is a bit high. I saw several references to 1/8" as a general target, and some of those were measured higher up the neck. 1/16" is a big difference in action, and it should make those chords up the neck much easier.
Here’s what appears to be a nice setup guide:
All the details may not be exactly the same on your banjo, but that should give you some idea.