The due diligence process by LIC is complete as per the directions of Insurance Regulatory and Development Authority of India (Irdai), they said.
State-owned Life Insurance Corporation will approach markets regulator Sebi after getting approval from its board, which will meet in Mumbai.
"The LIC-IDBI Bank deal will trigger an open offer to protect the interest of minority shareholders in the bank," said a source.
As per Sebi takeover code, an acquirer has to give an open offer to the shareholders of target company on acquiring shares or voting rights of 25 per cent or more.
As per current regulations, an insurance company cannot own more than 15 per cent in any listed financial firms.
It will get about 2,000 branches through which it can sell its products, while the bank would get massive funds of LIC.
The bank would also get accounts of about 22 crore policy holders and subsequent flow of fund.
If the deal goes through, IDBI Bank, which is grappling with mounting toxic loans with gross non-performing assets rising to a staggering Rs 55,600 crore at the end of the March quarter, will get much needed capital support to revive its fortune.
During the January-March quarter of last fiscal, the lender's net loss stood at Rs 5,663 crore. The government would not get the proceeds from the stake reduction as the money would be utilised for the bank's revival.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)