The Reserve Bank of India (RBI) has begun evaluating at least five potential bidders interested in picking up a majority stake in state-owned IDBI Bank Ltd, Reuters reported quoting three people familiar with the matter.

Kotak Mahindra Bank, Prem Watsa-backed CSB Bank and Emirates NBD are among those that have submitted expressions of interest, two of the people told Reuters.

The stake sale in the lender is the first major divestment across state-owned banks as part of a broader privatisation plan and could fetch the government Rs 300 billion ($3.66 billion) at the current market valuation, the news agency reported.

The government owns 45.48% of IDBI Bank, and is looking to divest a 30.48% stake in the lender, alongside state-owned Life Insurance Corp of India (LIC), which will sell 30.24% from its 49.24% holding in the bank.

Expressions of interest - the first step in the stake sale process - closed in January, the three people told Reuters.

The potential bidders have since begun due diligence on the bank. Financial bids were likely to be placed later this year.

The RBI is also conducting a "fit and proper evaluation", including extensive background and financial checks on the potential buyers, a crucial step before an investor is allowed to pick up a stake in a local bank, according to the Reuters report.

Potential investors have raised questions around the extent of government control in IDBI Bank after the divestment since it will retain a 15% stake and LIC, a government company, will have a 19% stake, Reuters reported.