Bank of Baroda has received regulatory approval to take over certain assets and liabilities of Mumbai's Memon Cooperative Bank, ahead of a planned full acquisition.

In a statement, the bank said that it is formulating a scheme for the takeover of the troubled firm, which will be subject to further approvals from the government and the Reserve Bank of India. BoB intends to raise up to Rs4,000 crore ($867 million)  in the current fiscal year. Memon's total business is estimated to be worth Rs500 crore, including Rs290 crore in deposits.  

The acquisition will be a welcome relief to Memon depositors, who since May 2009 were barred from withdrawing over Rs1,000 from their accounts. BoB will pay the full deposit amount to all account holders following approval from regulators.