The government and the State Bank of India (SBI) are in talks to firm up the latter’s fund-raising plans for the next few years, and all options?including an American Depository Receipt(ADR) issue?have been explored, financial services secretary R Gopalan said on Tuesday.

?One of the options (to raise capital) is the bond route. The second option is the ADR. There are number of other options… a preferential issue is one of them. So they will have to work it out,? Gopalan said.

?Ideally, (government) will look at a cash neutral scenario. We hope to reach a decision sometime in the second quarter of next fiscal.?

In 2008, the government had subscribed to its share in the rights issue of India’s largest commercial bank via issue of bonds.

SBI chairman OP Bhatt on Tuesday said in Guwahati his bank will offer shares via a rights issue within the next 12 months. He had earlier said SBI plans to raise Rs 40,000-50,000 crore in the next five years in addition to tier-II capital.

As a prelude to the bank’s capital raising initiatives, finance minister Pranab Mukherjee on Monday introduced The State Bank of India (Amendment) Bill 2010 in Lok Sabha.

Proposing to lower government holding in the bank to 51% from the current mandatory stake of at least 55%, the Bill also seeks to up SBI’s authorised capital to Rs 5,000 crore and allow it to raise capital through preferential allotment of shares, private placement, public float or a rights issue.

The government plans to use the entire Rs 16,500 crore allocated for recapitalisation of public sector banks in the Union Budget for 2010-11.

?As part of the first tranche, we will be infusing Rs 9,300 crore by May in eight to ten public sector banks. We expect Cabinet nod for this by March end or early April,? Gopalan said.

He said about eight to ten banks, including Allahabad Bank, Bank of Maharashtra, Central Bank of India, Canara Bank, and Dena Bank, qualify for recapitalisation as their tier-1 capital is below 8%.

Preference will also be given to those PSBs which fare well in terms of credit disbursal, he said.

Last year, World Bank had sanctioned $3.2 billion loan for recapitalisation of India’s public sector banks. Gopalan said government will infuse Rs1,200 crore in the current fiscal to recapitalise Central Bank of India, Uco Bank and United Bank of India.