Baring Private Equity Asia EQT is set to buy India-based Housing Development Finance Corp's educational loan unit - Credila Financial Services - for about $1.3 billion to $1.5 billion. Baring has formed a consortium with ChrysCapital for the transaction.

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The buyout fund will acquire 90 percent of the company, with HDFC retaining the remaining 10 percent stake, which it may sell over the next two years.

A formal announcement is expected by June-end, ahead of the merger between HDFC Ltd and HDFC Bank Ltd, to create the world's fourth-largest bank, the people said.

Also read: RBI allows HDFC Bank to raise stake in insurance arms; liquidity compliance norms stay the same

Earlier in April, the RBI had permitted HDFC Bank to continue holding HDFC's stake in HDFC Education and Development Services Private Ltd, engaged in operating three education schools, for a period of two years from the effective date. HDFC Credila Financial Services Ltd is subject to the shareholding being brought down to 10 percent within two years from the effective date and not onboarding new customers.