Capital markets regulator SEBI has allowed the government’s shareholding in IDBI Bank to be reclassified as “public” after its stake sale on condition that its voting rights do not exceed 15%, the lender said in a regulatory filing on Thursday.

The government is currently classified as a co-promoter of the lender.

The Securities and Exchange Board of India (SEBI) has also directed the new buyer to comply with minimum public shareholding norms within one year of the sale, IDBI said.

"The intention of GoI to get its shareholding re-classied as public holding shall be specified in the letter of offer dispatched to the shareholders of IDBI Bank in connection with the open offer made by the new acquirer," the bank said.

After the sale, IDBI Bank will make an application to the stock exchanges for reclassification of the government holding under public category.

The last date for submitting expressions of interest for IDBI Bank is Saturday. Once the government receives initial bids expressing interest from buyers, the Reserve Bank of India (RBI) would vet them to see if they meet the central bank's "fit and proper" criteria.

The government owns 45.5% of IDBI Bank while Life Insurance Corp (LIC) holds a 49.24% stake. State-run LIC is currently the promoter of the bank. While the government plans to divest a 30.5% stake in IDBI Bank, LIC will sale a 30.2% stake.