The government indirectly holds a 94.7 per cent stake in IDBI Bank through LIC.
It's likely the insurer will also consider selling its stake in the bank, as the new buyer would want to hold a majority in the lender, an official had earlier said.
Last month, the RBI removed IDBI Bank from its prompt corrective action framework, easing restrictions placed on the lender.
Presenting the Budget on February 1, Finance Minister Nirmala Sitharaman had proposed to take up the privatisation of two state-run banks along with IDBI Bank in FY22.
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