Mumbai: State Bank of India has picked banks to work on a bond offering that could raise about $1 billion, in India’s first sale of US dollar additional Tier 1 bonds since the country implemented Basel III rules, people with knowledge of the matter said.

India’s largest lender chose firms including Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. for the offering of loss-absorbing capital instruments, according to the people, who asked not to be identified as the information is private. HSBC Holdings Plc, National Bank of Abu Dhabi PJSC, SBI Capital Markets Ltd. and Standard Chartered Plc are also working on the sale, the people said.

Also Read: SBI to raise $1 billion through AT1 bonds

The Reserve Bank of India (RBI) has been encouraging sales of so-called AT1 bonds to help lenders comply with Basel III capital standards by the March 2019 deadline. Indian banks require $90 billion in additional capital to meet the target, with most of that needed by state-run lenders, according to Fitch Ratings Ltd.

A spokesman for State Bank of India (SBI) said he couldn’t immediately comment.

The Indian central bank announced last month it will allow banks to count perpetual rupee-denominated bonds sold offshore to help meet this goal. The SBI said 24 August it will raise as much as 11,100 crore ($1.7 billion) in additional Tier 1 capital through perpetual debt instruments in dollars or rupees.

The Mumbai-based lender raised 2,100 crore from a private placement of additional Tier 1 bonds with a 9% coupon, according to an exchange filing Tuesday. Bloomberg