If the plan goes ahead the rights issue would become the biggest in British banking history, beating the $20 billion raised by HSBC earlier in 2009.
The Financial Times has reported that Lloyds is sounding out investors about the idea, which is said to be supported by the government.
Its plan comes in light of news that Lloyds may be forced to sell off assets and branches by the European Union so that it complies with state aid rules.
The British government currently owns 43 per cent of Lloyds after it was part of the October 2008 bank bailout which saw chancellor Alastair Darling hand over almost $59 billion of taxpayers' money to save Lloyds, Halifax Bank of Scotland and the Royal Bank of Scotland.
By Asim Shah