The heads of Gramin banks, earlier known as regional rural banks (RRBs) and the Finance Minister are scheduled to meet on July 23 to review the status of financial inclusion drice being carried out in rural areas.

The Government is likely to absorb the losses incurred by new gramin banks set in the north eastern and other terrorized areas in order to encourage the set up of more banks there.

According to a source having knowledge about the matter, it is planned that around 750 new branches would be opened in the unbanked areas this year.

"The scheduled commercial banks are able to manage losses incurred at branches in non-profitable areas due to their sheer size and volume of business from other proditable areas. However, for regional rural banks, this kind of cross subsidisation is not possible and therefore it is important to absorb the losses for at least five years," Dilip Kumar Mukherjee, secretary-general, All India Regional Rural Bank Employees Association said.

Currently there are 82 RRBs operating in the country with 15,200 branches across 593 districts.

According to a report submitted to RBI on Upgradation of Technology, it was recommended that core banking solutions (CBS) should be implemented in these banks by 2011. CBS has already been implemented in the commercial banks with the motive of increasing their efficiency.