Bank loans for films likely

According to K Kannan, Chairman of Bank of Baroda, who also chairs the joint committee, the final draft of the guidelines should be ready when the panel is scheduled to hold another round of talks with film industry representatives in the last week of February. Risk factors in film production and recovery of loans are also likely to be discussed at themeeting.

“Our concern is recovery of interest along with the principal since we are dealing with public money. We will consider giving funds not only to the top five producers but anyone who wants to make a film. We will consider each proposal separately on merit because film making is an individual enterprise. We also want to know what insurance cover a producer offers. We have to see how the viability of the project is spelt out,” Kannan observed.

Land and production machinery would be considered for collaterals. “We will also consider financing the distributors. They have a library of films and if one film fails they can recover their money from another,” he pointed out.

The committee was set up on May 10, 1998 after film production was granted industry status and comprises Pahlaj Nihalani of Association of Motion Pictures and TV Programme Producers, N N Sippy of Indian Motion Pictures Distributors’ Association, K D Shorey of Film Federation of India and L Suresh of South India Film Chamber ofCommerce. The panel had met film financiers to apprise themselves of the existing mode of funding film productions. “They visit the sets to check out how their money is spent. We can’t do that which is our main worry,” he said.

Kannan informed that producers felt that rights to the negatives and distribution rights should be good enough as collaterals for the banks to sanction loan. The committee, however, has still not been able to collect information on how Hollywood films got funds from banks in the United States.

But the members are aware that unlike in India even individual producers in the US are associated with major studios which are corporate houses controlling large distribution network and exhibition outlets.