Barclays plans to raise £5.8 billion sterling from its shareholders to answer pressure from Britain's regulator for the bank to boost its capital strength and meet another £2 billion mis-selling charge.
Barclays said it will offer shareholders one new share for every four owned at 185 pence in a rights issue.
The rights issue will offer existing shareholders the right to buy discounted shares first to avoid diluting them.
The bank also plans to sell £2 billion of bonds that convert into equity or are wiped out if it hits trouble, and shrink its loans.
Past problems continue to haunt Barclays and its cashcall comes after the Bank of England last month told it to increase its leverage ratio - a measure of equity to assets - to reduce its risk.
That left Barclays with about a £7 billion capital hole to fill to lift its leverage ratio to 3% from 2.5% under the Bank of England's methodology.
Barclays had planned to improve the ratio by the end of 2015, but the central bank wanted it done more quickly.
Shares in the bank sank in London trade, closing 5.7% lower this evening.
Barclays also set aside another £2 billion in its first-half results to compensate customers for mis-selling, far higher than was expected.
The bank's compensation charge for PPI alone has reached £4 billion and Barclays said a drop-off in claims per month has not been as quick as expected, despite falling by 46% since the peak in May 2012.
UK banks have now set aside more than £15 billion to cover payment protection insurance (PPI) compensation, and Barclays' latest move signals rivals will have to bump theirs up.
Barclays also set aside another £650m for the mis-selling of complex interest rate hedging products to small firms.
Excluding mis-selling provisions, underlying pre-tax profits fell 17% to £3.6 billion over the first six months of 2013 as the bank counted the cost of a group-wide restructure. That figure was just below the average forecast of £3.7 billion from analysts.
Barclays said its fundraising was a "bold but balanced plan" which would see it meet regulator demands by June next year. It stressed it would not impact on its aims to boost lending to households and businesses.
However, shares fell 5% as the rights issue was far higher than expected and as Barclays admitted its plans will put back some of the financial targets under its overhaul, dubbed Project Transform.
"I am certain the decisive and prompt action we are taking will leave Barclays stronger," commented Barclays chief executive Antony Jenkins.
The Prudential Regulation Authority (PRA) said it had "agreed and welcomed" the bank's plans to bolster its reserves.
Mr Jenkins sparked a spat with the PRA in recent weeks after suggesting that the bank may be forced to cut lending to meet the stringent new demands. But a Bank of England spokesman said the measures being taken were "credible" and would not cut back on lending to the wider economy.
