MUMBAI - The Indian government will likely complete the sale of its majority stake in IDBI Bank only after the country's general elections in mid-2024, said three sources aware of the matter, stretching out a process that began in October 2022.

The Reserve Bank of India, also the country's banking regulator, has not yet completed "fit and proper" vetting on the interested bidders, who include Emirates NBD and Canadian billionaire Prem Watsa, after which the bidders can do their due diligence and place their financial bids, the sources said.

The finalisation of an agreement to buy 60.7% of IDBI and regulatory approvals will take place only after general elections, the first source said. The sources declined to be named as they are not authorised to speak to the media.

India's general elections are expected by May next year and an outgoing government typically avoids major policy decisions just ahead of polls.

Last week, a government official said a sale was unlikely this financial year, putting at risk the government's target of raising 510 billion rupees ($6.13 billion) through share sales.

The government had asked the RBI to speed up the vetting process but this is taking time as foreign entities are also interested in acquiring the lender, two sources said.

The Indian finance ministry did not immediately respond to an email seeking comment.

After the central bank's clearance, potential bidders will need at least two months to assess IDBI Bank's financials and "adequate time" to firm up bids, said the third source.

The government, which owns 45.48% in IDBI Bank, and state-owned Life Insurance Corp of India, which holds 49.24%, together plan to sell 60.7% of the lender.

On Tuesday, the government cancelled the bidding process for hiring an asset valuer for the sale after only one bid was received.

This bidder's conditions were not acceptable to the government and a fresh process will be initiated soon, said the second source.

($1 = 83.2440 Indian rupees)

(Reporting by Nikunj Ohri and Ira Dugal; Editing by Savio D'Souza)