New Delhi, Feb. 26 -- In a bid to be in line with proposed Reserve Bank of India (RBI) norms regarding business overlaps and holding limits of banks in their subsidiaries, Axis Bank Ltd has begun exploring a possible sale of Axis Finance Ltd, two persons familiar with the development said on the condition of anonymity.

Further, the two people added that a planned public listing of Axis Finance has been set aside in favour of a private selloff because of potential higher valuations.

Axis Bank, India's third largest private lender, is looking at a valuation of around $1 billion for its wholly owned NBFC (non-banking finance company) subsidiary, the people said. Investment bank Morgan Stanley has been tasked to find a buyer for Axis Financ...