The bill to reducte the stakeholding of government on the country's largest lender, State Bank of India has been passed by the Parliament. Now, the government stake would be reduced to 51% thereby enabling the bank to raise more capital.

"The bill (State Bank of India Amendment 2010) also seeks to enable the SBI to issue bonus shares," Finance Minister Pranab Mukherjee said.

The government currently holds 59.41 per cent stake in SBI.

The bank has recently posted a 25% rise in its net profits for Q1.

Mukherjee however said that there is no plan to further bring down the govenment holding in the bank. He said the government will not dilute its majority stake in the bank.