MUMBAI, Oct. 14 -- State Bank of India (SBI), the country's largest lender, is set to issue what could be the first domestic bank bond of the current financial year. Two people familiar with the matter told Mint that the bank plans to tap the debt market this week with 10-year tier-II bonds.

The bank aims to raise up to Rs.7,500 crore through the offering, which has a base issue of Rs.5,000 crore and a green-shoe option of Rs.2,500 crore. The bonds will carry a five-year call option, one of the persons said. "The bond issue is likely to come this week, with bidding expected on Friday."

SBI Capital Markets Ltd is arranging the issue. An email seeking comment from SBI went unanswered at press time. The proceeds would likely be used to mee...