State Bank of India (SBI), the country’s largest lender, has received finance ministry approval

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for a capital infusion of Rs. 6,000-8,000 crore ($1.2 billion-$1.6 billion), a news channel reported on Monday, citing the bank’s chairman.

The capital infusion will be made by 31 March and will be via a preferential issue of shares, Pratip Chaudhuri was reported as saying.

Late last month, Diwaker Gupta, chief financial officer, told Reuters the bank had received formal confirmation from the government on capital infusion.

The bank, which is 59% state-owned, has since 2010 sought as much as Rs. 20,000 crore from the government through a rights issue in order to build up its capital base.

In early October, Moody’s downgraded the standalone rating for State Bank of India, the country’s dominant lender, citing “modest” capital and weakening asset quality.

Gupta had said the government will ensure the bank has 8% tier I capital adequacy by March-end. At the end of September, it stood at 7.47%.

Earlier this month, Standard and Poor’s said the Reserve Bank of India’s proposed guidelines for implementing Basel-III norms will strengthen bank’s capitalisation and credit profile.

The RBI said banks should have minimum tier-I capital of 7%, while total capital must be at least 9% of risk-weighted assets under the Basel III draft guidelines.

Shares in the state-run lender rose as much as 2.6% to Rs. 1,825 immediately after the report.