The bank will issue listed, unsecured subordinated debentures, company secretary M. R. Gunesekera said in a statement to the Colombo Stock Exchange.
Analysts believe the bank will raise between 500 million to 1,000 million from the debenture.
Seylan has a long-term national rating of A- (lka) from Fitch. Its subordinated debentures have earlier been rated BBB+ (lka).
It is Sri Lanka's fifth largest commercial bank, and was established in 1988 by the Ceylinco group.