Banks a boon for upcoming filmmakers
(No Ratings Yet)With major banks now foraying into film financing, more and more upcoming directors are finding it easier to fulfil their celluloid ambitions.
The recent example is Sachin Bajaj, whose directorial debut “Naksha”, an adventurous journey of fun, mystery and thrills, is financed by Industrial evelopment Bank of India (IDBI). The film releases Friday.
Made at a budget of Rs.200 million, the film is co-produced by Akshay Bajaj, who initially refused to discuss the budget but on further persuasion spoke about it.
“The movie cost me more than Rs.200 million. Part of it has been financed by IDBI. It is always better to get your films financed by established institutions and IDBI has been of great help to many people like me who want to try something new in filmmaking,” Bajaj told IANS.
He revealed that banks like IDBI finance movies at much lower interest rates than private financers, making it easier for producers like him to think about making films.
A renowned movie director had once in the past blamed the lack of financers backing him as the primary reason not to try out something new and different.
But today, with banking sectors foraying in films business, things have changed and arranging finances have become easier for the aspirant directors.
IDBI, which started off by investing Rs.70 million in the Amitabh Bachchan starrer “Aankhen”, is seen as the leader in this sector and has decided to double its investments in Bollywood to the tune of Rs.2 billion.
It has sanctioned Rs.1.8 billion while disbursals stand at Rs.850-900 million towards movie projects.
“It has proved to be a successful venture for us, giving us returns which match other industry sectors. This is why the IDBI board took the decision to increase the upper limit to Rs.2 billion,” Jitender Balakrishnan, IDBI deputy managing director, was quoted as saying.
However, IDBI funds only big names, who have a track record of three years and insists on a 1:1 debt equity ratio.
“We don’t deviate from these lending norms. Besides, the size of the loan can’t be less than Rs.40 million and anything above Rs.200 million will have to be backed by a completion guarantee,” said Balakrishnan. Another bank, The Export-Import Bank of India (Exim), which entered the film business in April 2004, has spent Rs.580 million for nine movies so far.
It includes Rs.400 million to big player Yash Chopra for “Veer Zaara”, “Hum Tum”, “Bunty Aur Babli” and “Dum”. It has also lent Rs.80 million for “Mangal Pandey - The Rising”. And its latest venture is Farhan Akhtar’s “Don”, in which they have put in Rs.100 million.
The Bank of India, Bank of Baroda and UTI are the other banks that have started investing in this sector, but in a very limited way.
Karnataka Bank Ltd, the old private sector bank, also ventured into financing film and television serials with “Malgudi Days”, a screen adaptation of late R.K. Narayan’s book. It also invested Rs.10.5 million in some projects of southern filmmaker T.S. Narasimhan.
The film Industry is becoming a game for the big players.
Apart from banks, big business houses are finding it a lucrative business proposition too.
Sahara and UTV are pumping money into production and marketing and have created blockbusters like “No Entry”. Business tycoon Anil Ambani’s Adlabs Films is reportedly planning to invest in all the segments of film business.
However, Bank of Baroda, an early lender in the film business, is putting its foot forward cautiously because it says its early experience was not good.
— IANS
Leave a Reply