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

 The state-run lender will raise the funds in one or more tranches via a public offer or a private placement of senior unsecured notes. These notes will be denominated in US dollars or other major foreign currencies, the bank said.

The Mumbai-based lender did not mention the intended use of the raised capital.

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

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

In January, SBI raised Rs 5,000 crore (about $600 million) by issuing 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.