New Delhi: Country's largest lender State Bank of India today said it will launch its Rs 20,000 crore rights issue this year to augment its lending operation. The bank is in dialogue with the government and the proposed rights issue should happen this year, SBI Chairman Pratip Chaudhuri said here. SBI had earlier announced its intention of coming out with the rights issue in the previous fiscal ending March 31, 2011. The government owns 59.4 per cent in the bank. The bank had raised over Rs 16,000 crore through a rights issue in 2008. When asked about SBI's plan to merge with associate banks, Chaudhuri said, the bank is working on it and will initiate something this year. He said SBI would prefer to merge associate banks where SBI holds 100 per cent, rather than where the holding is less. SBI did first ever amalgamation of its associate State Bank of Saurashtra in 2008, followed by State Bank of Indore in August last year. SBI has five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. SBI plans consolidation of remaining five associate banks with itself in the next 12-18 months, the Finance Ministry had earlier informed a Parliamentary Committee. Among these, the State Banks of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed companies.