State Bank of India said on Tuesday it would launch its Rs 20,000 crore (Rs 200 billion) rights issue this year to augment its lending operation.
The bank is in dialogue with the government and the proposed rights issue should happen this year, SBI chairman Pratip Chaudhuri said in New Delhi.
SBI had earlier announced its intention of coming out with the rights issue in the previous fiscal ending March 31, 2011.
The government owns 59.4 per cent in the bank.
The bank had raised over Rs 16,000 crore (Rs 160 billion) through a rights issue in 2008.
Asked about SBI's plan to merge with associate banks, Chaudhuri said, the bank is working on it and will initiate something this year.
He said SBI would prefer to merge associate banks where SBI holds 100 per cent, rather than where the holding is less.
SBI did first ever amalgamation of its associate State Bank of Saurashtra in 2008,