By: Screen Weekly, IndiaFM
Monday, July 02, 2007
For years, the world's largest film industry was the fiefdom of diamond and cotton merchants. In fact, seven years ago, Bollywood was financed by these traders, often charging hefty rates of interest. However, thereafter, the colour of money in the Mumbai film world was tainted by underworld fundings.
Although you still hear of a director here and an actor there getting calls from the Bhais, things have largely changed, for the better, in Bollywood after the government declared it an "industry" in 2000. As the industry progresses inexorably towards corporatisation, you hear less and less of a director going bankrupt because his or her movie failed at the box office and the money-lenders could not be paid back. One of the reasons could be the neighbourhood banks have begun financing Bollywood, although not in a big way.
[an error occurred while processing this directive]Consider this: Exim Bank, which funded the industry to the tune of Rs 100 crore last year, has chalked out a plan to increase funding to Rs 300 crore this financial year. Among some of the films it helped finance are the Yash Raj Films' Ta Ra Rum Pum, Cheeni Kum, Honeymoon Travels Pvt Ltd, Kabul Express, Dhoom:2, Don-The Chase Begins, Fanaa, Bunty Aur Babli, Salaam Namaste, Veer- Zaara, Mangal Pandey - The Rising, Dhoom and Hum Tum. Exim Bank is also funding a slew of animation films that are yet to hit the silver screen.
The Indian film industry is the world's biggest, according to a Yes Bank report, if you go by the numbers. In 2004, there were 934 films certified across the country, with Hindi accounting for 245 of them. What's more, a staggering 3 billion people have gone to the theatre to watch movies, which is almost double the US market and three times that of the rest of Asia, says Exim Bank's website. However, the Indian film industry is considered to be the most complex and fragmented national film industry the world over for a simple reason that it comprises a cluster of regional film industries that include Hindi, Telugu, Tamil, Kannada, Malayalam, Bengali and others.
That Bollywood is going global is also evident from the fact that Exim Bank is increasing its stake in the industry- the bank finances only those films that carry some export value with them. Says SR Rao, executive director of Exim Bank: "We have been involved selectively in film financing as we clearly recognise the potential of such films to be commercially viable propositions operating in an international environment and to be in a position to generate foreign currency earnings in a global context."
The other state-run bank that is into film financing is IDBI Bank. But it finances only feature films, not ad films, short films or documentaries. It can provide financial assistance of not less than Rs 2 crore and not exceeding 50% of the estimated cost of the film.
Meanwhile, save for these two major banks, no other private or public sector bank has come so far in a big way to finance films, thus leaving the industry to continue to be a privately funded one. When contacted by journalist, an HSBC spokesman said as a policy the bank does not do any kind of film finance.
The private sector bank, Yes Bank, has restricted its activities to providing advances to firms like Pritish Nandy Communications (PNC) and 'Studio 18'. While PNC's latest films include Just Married and Pyar Ke Side Effects, Studio 18 has ventured into co-production and distribution activities. As far as IndusInd Bank is considered, it says that it may enter the field sometime in the future, but has not chartered out any time schedule.