The Hindu Business Line : Film financing: Banks sing regional tune

Mumbai, Aug 29 Banks are keen on increasing their exposure to regional cinema with more and more big-banner Bollywood filmmakers producing such movies and the kind of growth potential they see in this sector, say media analysts. Among regional movies, South Indian and Bhojpuri movies seem to be the favourites of these filmmakers.

Some of the big banners which have entered the regional movie space are Shri Ashtavinayak Cine Visions, which has ventured into Tamil movies, B.A.G. Films into Bhojpuri and Saregama into Bengali movies. Bankers say that though there is risk in lending to films, non-performing assets are rather low.

Generally, the bank gets more than 40 per cent of the money even before the launch of the movie through sale of broadcast rights and DTH and DVD and other such rights, while about 60 per cent of the money is repaid after the release.

Interest rates

Mr T.S. Narayansami, Chairman and Managing Director, Bank of India, said: “Though the entertainment media is not as transparent as other industries, the bank can gauge its budget versus other ingredients such as the star cast, directors and past record of the producer, etc.” Though the bankers were unwilling to disclose the rate of interest charged on such loans, some senior bankers said that it would be within the bracket of prime lending rates. The collateral required for such loan is generally some kind of landed property, said a senior banker.

Film Budget

Bankers are also observing an increasing trend in the size of budgets of all films, including those in regional languages. “For regional films, budgets would vary depending on the language it is made. While the budget for Telugu films is more or less in line with Hindi films, those for Tamil films is somewhat lower than Telugu films,” said Mr Jitender Balakrishnan, Deputy Managing Director, IDBI.

IDBI has financed around 38 regional films under its film financing scheme, of which 14 are in Telugu, 16 in Tamil and eight in Kannada, said Mr Balakrishnan. Some of the regional language films financed by it are Anniyan, Tirupachi, Ath adu, Dasavatharam and Varanam Aayiram. Contrary to the popular notion, regional movies may not be always low-budget; a typical example is the Rajnikanth starrer Sivaji. The Rs 80-crore film was partly financed b y Indian Overseas Bank. The popularity of regional movies, especially Tamil movies, in overseas markets like South-East Asia is growing. Exim Bank, which finances Indian films that have potential to be screened in overseas markets, is also looking at the potential in regional films.

“We do expect to work towards financing regional films, including Tamil films, which have demonstrated a track record of successful performances in overseas markets,” said Mr Mathew John, General Manager.