New Delhi, Jul 16 (IANS): The board of state-run Life Insurance Corporation (LIC) on Monday approved the acquisition of up to 51 per cent stake in the government-owned IDBI Bank, Economic Affairs Secretary S.C. Garg said.

Briefing reporters following the board meeting here, Garg said the sale process is likely to take place through preferential shares.

"The amount we're looking at (from stake sale) will be as per the issue of the preferential shares," he said.

Queried on whether an open offer would also be made for the IDBI stock, Garg said this was unlikely.

"An open offer may not come about because the amount of public shareholding (in IDBI) is very small, only about 5 per cent and will not much much bearing on the stake sale," he said.

LIC will now approach the markets regulator Securities and Exchange Board of India (Sebi) for approval, as well as for clearance from the Reserve Bank of India and the government, Garg said.

The Insurance Regulatory and Development Authority of India has already given its approval for the stake purchase.

IDBI, whose gross non-performing assets (NPAs), or bad loans, amounted to a staggering Rs 55,600 crore at the end of the fourth quarter ended March, posted a loss of Rs 5,662.76 crore for the quarter, its numbers being pulled down further by its deteriorating NPAs.

The bank had reported a net loss of Rs 3,199.77 crore in the corresponding quarter of the 2017-18 fiscal. It has now reported losses for the sixth successive quarter.

The All India Bank Employees' Association is opposing the purchase by LIC saying this would bring down the government's stake in the bank to below 51 per cent which is contrary to the assurance given to the Parliament when IDBI was converted into a bank.