The Bank of China (BOC) board has agreed to sell up to 40 billion yuan (5.86 billion U.S. dollars) of bonds convertible to A shares to improve capital adequacy.

The proposal will be turned into the first temporary shareholders' meeting in 2010, which will be held on March 19, for approval.

Excluding issuance costs, the proceeds from the issuance of the six-year convertible bonds will be used to replenish the bank's capital base and working capital and to lift its capital adequacy ratio, according to the BOC, the third largest lender by market value in China.

The BOC has been implementing positive financial policies and relatively loose monetary policies since 2009.

The BOC capital adequacy ratio stood at 11.63 percent and the core capital adequacy ratio at 9.37 percent by the end of September 2009.