Finance minister Yashwant Sinha's assurance that the public sector character of these banks would remain intact fell in deaf ears, as the Opposition, charged the government with selling the national assets to MNCs through the proposed move and helping "wilful defaulters" get away with loans totalling over Rs 58,000 crore.

Not satisfied with the voice vote, they pressed for a division which gave 209 votes in favour of the Bill's introduction and 159 against it.

Those who described the Bill as "unconstitutional and anti-people" included former prime minister Chandrasekhar and members from the Congress and Left parties. However, defending the decision, the finance minister said the government was just implementing the recommendations of the Narasimhan Committee Report which was appointed by the United Front government.

The committee, Mr Sinha said, had recommended the dilution of government equity in these banks so as to enable them to recapitalise, expand as also to achieve global standards, adding the government had sought eminent legal opinion and consulted the law ministry on its legislative competence.

Titled Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutional Laws (Amendment) Bill, 2000, the Bill also provides for removing the restrictions on free transferability of shares held by the Central government with a view to facilitating acquisition, merger and financial revamp on a case to case basis.

To facilitate cleaning up of the balance sheet, the Bill also seeks to remove the existing restrictions which require the reduction of capital not below 25 per cent in all PSU banks. Mr Sinha also introduced the Financial Companies Regulation Bill, which seeks to protect the interests of the depositors and regulate FIs in a more effective manner. It provides also for compulsory registration of all financial companies with the Reserve Bank as also its prior approval for any substantial change in the management, location of its registered office or name.