IDBI banks on dream factory

Komal Nahta

The IDBI executive committee recently approved a proposal for financing films.

The initiative is a consequence of the Union finance ministry's directive of a year ago, stipulating that movies could be considered an industry.

The salient features of the proposal are:

• Only corporate entities with proven track records will be eligible for IDBI finance.
• Minimum financial assistance will be Rs 5 crore and it will not exceed 50 per cent of the film's cost. Accordingly, Debts Equity ratio will not exceed 1:1.
• Promoter will contribute at least 30 per cent of the total cost.
• An upfront fee of 1 per cent of the total finance availed of will be charged.
• Only projects covered by insurance and completion bonds will be eligible for finance.

IDBI is currently in the process of setting up a separate cell dedicated to film financing. At the outset, IDBI has decided to restrict its portfolio size to Rs 100 crore and 20 films.

The scheme is expected to be operational within a month or two.