The Board of Directors of state-owned Life Insurance Corporation (LIC) of India is likely to meet next week to approve the proposal to buy up to 40 per cent stake in IDBI Bank.

Sources close to the development said the Board is also expected to discuss and finalise the modalities of the investment, including the valuation and timeline for the deal and structure of the new Board of IDBI Bank.

“The Board of Directors of LIC is likely to meet early next week. There have been a number of discussions on the deal with the Finance Ministry and it will now take it forward,” the sources said.

The insurer is likely to make an open offer for the acquisition in the bank.

The Board of IDBI Bank will take up the proposal, following which it will approach the Reserve Bank of India and SEBI for approval.

In hopes to revive the debt-ridden IDBI Bank, LIC is set to acquire a majority stake in the lender and in return infuse about ₹10,000-13,000 crore.

The Insurance Regulatory and Development Authority of India had on June 29 given a one-time exemption to LIC for the acquisition, which will take the insurer’s total holding in the lender to over 51 per cent. It currently holds 10.82 per cent stake in the bank.

The Centre is keen to complete the transaction in the next three-four months, giving adequate time to IDBI Bank to turnaround its finances this fiscal.

IDBI Bank has non-performing loans totalling ₹55,588 crore as of March 2018 and is under the RBI’s Prompt Corrective Action rules. Its net loss stood at ₹5,663 crore in the period.