I found out a few things
I can enable local users to login by making following modification
one_process_model=NO one process per connection to gain performance so only allowed for anonymous.
if you edit your /etc/vstpd.conf then restart daemon using
If you just have anonymous login then do
$ftp -u IP
Connected to IP
220 (vsFTPD 2.0.6)
(username)anonymous or ftp(YOUR wish)
331 Please specify the password.
Password:same as above
230 login successful
if you want to allow anonymous to access /
#mkdir /home/ftp/me;mount --bind / /home/ftp/me
Also note that mounted file systems are not accessible in /home/ftp/me.For this you need to create another folder /home/ftp/data(whatever name you want) & then bind partition to it.
Lastly if you have bound a folder to home directory of anonymous.Now your work is done & you want to remove access to that folder for anonynmous then
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Usually ftp is login & passowrd for anonymous.