IDBI Bank on Thursday surged nearly 7 per cent in intra-day trades on reports the Reserve Bank of India (RBI) has deemed the bidders `fit and proper’, speeding up the divestment exercise.

The private sector lender saw its shares rise to a day’s high of ₹94 on the BSE after which it settled at ₹92.19, a gain of 4.86 per cent over the last close.

A media report earlier said the banking regulator had given its report on the fit and proper norms — it ensures the parties are in compliance with various local and international regulations — on all bidders barring one which did not share information.

With the RBI giving its green signal, the government could now take the next steps for privatisation which was first announced in the Union budget of 2021.22.

Finance minister Nirmala Sitharaman is expected to make an announcement in her budget next week.

The Department of Investment and Public Asset Management (Dipam) in October 2022 invited bids to sell a 30.48 per cent stake in IDBI Bank, along with a 30.24 per cent stake in Life Insurance Corporation. The government (45.48 per cent) and LIC (49.24 per cent) jointly hold 94.72 per cent stake in the private sector bank, which will come down to 34 per cent following the strategic sale.

In March, Fairfax, the Canadian investment holding company had reportedly improved its offer for IDBI Bank by submitting a fresh proposal to the Centre that included an all-cash deal.

Earlier, Dipam said the potential buyers should have a minimum net worth of ₹22,500 crore and must have reported a net profit in three out of the last five years.