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SHANGHAI/BEIJING, June 9 (Reuters) Bank of China aims to publish on Monday the prospectus for its domestic initial public offer of A-shares, providing the securities regulator approves its offer application, two sources familiar with the deal said on Friday.

The bank aims to issue 60 percent of the offer to institutional investors on June 19, and the remaining 40 percent to retail investors on June 23, the sources told Reuters.

''The bank has prepared to release the A-share IPO prospectus on Monday and hopefully the CSRC will approve its IPO application late today,'' said one Shanghai-based banking source, referring to the China Securities Regulatory Commission.

A second banking source in Beijing confirmed the details. Bank of China declined to comment on Friday.

The CSRC was due to consider Bank of China's application on Friday, official Chinese media said, and the application is widely expected in the banking industry to be approved.

In recent weeks Bank of China has conducted the world's fourth largest IPO in Hong Kong, raising $11.2 billion including an overallotment option. It has also filed for a Shanghai IPO that could raise up to 20 billion yuan (US$2.5 billion).

The domestic stock offer will be largest IPO ever on the mainland's Shanghai and Shenzhen stock exchanges, toppling a record held by Sinopec Corp., which made a US$1.5 billion offer in 2001.

In Chinese markets, institutional investors comprise domestic companies and fund management firms. Foreign investors cannot purchase Bank of China's A-share issue, the sources said.

LOCK-UP PERIOD ''There will be two types of institutional investor for Bank of China's A-share issue,'' said the Beijing source.

''For Type 1, they will be required to hold their stock investments in Bank of China for at least 18 months. For Type 2, the lock-up period will be from 3 months to 6 months.'' The sources said Type 1 institutional investors might be big Chinese state-owned companies which would be regarded as strategic investors by Bank of China.

Type 2 institutional investors would be local fund managers and securities houses, said the sources, who declined to be identified before an official announcement.

China recently lifted a year-long ban on domestic stock offers that had been intended to reduce pressure on the stock market during reforms. The market is now booming, with the benchmark Shanghai stock exchange index up more than 30 percent this year.

In recent years, most of China's biggest companies chose to list in Hong Kong in order to obtain access to foreign capital. But authorities are now encouraging blue chip firms to undertake dual listings in both Hong Kong and the mainland, in order to improve the quality of domestically traded companies.

China's CITIC Securities, Guotai Junan Securities and Galaxy Securities will underwrite Bank of China's domestic offer, while BOC International, a subsidiary of the bank which was one of its Hong Kong IPO sponsors, will act as financial adviser.

($1 = 8.0089 yuan) REUTERS PV ND1740