The Banking Companies (Acquistion and Transfer of Undertakings) and Financial Institutional Laws (Amendment) Bill (2000) was introduced by the Finance Minister Yashwant Sinha, in the the Lok Sabha, amid vehement protests by the Opposition. After the House approved its introduction by a voice vote, the Opposition demanded a division. While 209 members voted in favour, 156 voted against its introduction, Mr Chowdhary s aid and added : "This move is in the favour of state-run banks only. Because of this decision, banks can raise enough capital from the market, which will be useful for their future growth and expansion, and increase their profitability. This move will also make them financially strong to compete with foreign and private-sector banks. Also, banks will have to report everything to their shareholders".

The IBA is of the view that the VRS is envisaged to assist banks in their efforts to optimise use of human resource and achieve a balanced age and skills-profile in tune with their business strategies, expansion, and increase their profitability. Mr Chowdhary opined that losses are part of business. "But give some time to these banks, they are restructuring their strategies. They will improve their profitability as well compete very strongly", he said. When asked on the effect of this on priority sector lending by banks, Mr Chowdhary said: "Not at all. The Reserve Bank of India has it's well-managed rules and regulation to prevent such kind of activities. One should not forget that after dilution of government's equity, the Centre will continue to supervise these banks".

The IBA's CEO was categorical that there is no possibility of corporates taking over these banks. Mr Chowdhary said: The Banking Regulation Act and Companies Act are very different (you do not have proportional voting rights) such (take-over) things are not possible.