State Bank of India, the country's largest lender, said on Tuesday that its board has approved raising up to $3 billion via debt in the current financial year.

The state-run lender will raise the funds in one or more tranches through a public offer or a private placement of senior unsecured notes, which will be denominated in U.S. dollars or another major foreign currency, it said.

The Mumbai-based lender did not mention what the proceeds will be used for.

Indian banks are shoring up their capital base to meet the rising demand for loans.

Several state run-lenders, including Canara Bank, Punjab and Sind Bank and Punjab National Bank, plan to raise funds via debt this fiscal year.

In January, SBI raised ₹10,000 crore (about $600 million) by selling Basel III-compliant additional tier-I perpetual bonds.

The lender is also open to raising equity capital to support growth, Chairman Dinesh Kumar Khara said last month.

SBI's shares were up 0.8 per cent on Tuesday and have gained 30.5 per cent so far this year.