The Centre is keen to finalise the acquisition of state-owned IDBI Bank by Life Insurance Corporation of India in three-four months to ensure the lender’s balance-sheet shows an improvement by next fiscal.

“The insurance regulator (IRDAI) has already cleared the transaction and other approvals are also in the pipeline. The idea is that before the end of 2018, the transaction should be finalised and it should start showing results by the end of the financial year,” said a person familiar with the development.

The Finance Ministry is already in discussions with IDBI Bank and LIC on the timelines and proposed valuation for the acquisition.

As IDBI Bank is a listed entity, the deal is likely to take place at market value. The boards of IDBI Bank and LIC are, however, expected to come up with a final proposal on the valuation and timeline by the end of this month.

Whether LIC — which has for long been eyeing a banking foray — gets management control of IDBI Bank is as yet undecided. Sources said the issue is being looked into but a lot will depend on what the RBI says.

IDBI Bank has a life insurance joint venture, IDBI Federal Life Insurance, while LIC has stakes in several banks. Issues related to these holdings need to be sorted out.

Additionally, market regulator SEBI, and possibly the Union Cabinet, have to clear the deal. “All this will be done in the next three to four months,” said the source.

The Insurance Regulatory and Development Authority of India (IRDAI) had, on June 29, given a one-time exemption to LIC to acquire a 40 per cent stake in debt-ridden IDBI Bank, taking its total holding in the lender to over 51 per cent. The acquisition will help infuse ₹10,000-13,000 crore in the bank, which had non-performing loans totalling ₹55,588 crore as of March 2018 and is under the RBI’s Prompt Corrective Action.

Shares of IDBI Bank fell 6.25 per cent on the BSE to close at ₹52.50 on Tuesday.