MUMBAI -(Dow Jones)- State Bank of India (500112.BY) said Tuesday it has received the approval of its shareholders to raise about INR79 billion ($1.57 billion) via a preferential allotment of shares to the federal government.

Shareholders have approved allotment of about 36 million shares at a price of INR2,191.69 each to the government, the state-run lender, the country's largest bank by assets, said in a filing with stock exchanges.

The capital infusion by subscribing to the bank's shares will increase the government's shareholding in SBI to 61.58% from 59.40% now, it said.

The bank's shares were trading at INR2,190.10, up 1.4%, at 0930 GMT on the Bombay Stock Exchange.

-By Nupur Acharya; Dow Jones Newswires; +91-22-61456117; nupur.acharya@dowjones.com