The Telegraph
 
 
IN TODAY'S PAPER
CITY NEWSLINES
 
 
ARCHIVES
Since 1st March, 1999
 
THE TELEGRAPH
 
 
Email This Page
Banks prefer to throng multiplexes
Many suitors

Calcutta, Oct. 4: Bankers may not be cinema buffs, but they are quite keen to invest in television, entertainment parks and multiplexes.

According to the available data, about 27 private and public sector banks have sanctioned over Rs 528.6 crore ever since the sector was granted industry status.

Foreign banks have taken the lead in this regard and Bank of Bahrain & Kuwait has already sanctioned over Rs 80 crore for this purpose. BNP Paribas, ABN-Amro Bank and Standard Chartered Bank also seem to have evinced interest in entertainment business. Local private banks that have shown interest include ICICI Bank which has earmarked Rs 44 crore and UTI Bank with a kitty of Rs 35 crore. Among the public sector banks, Oriental Bank of Commerce, State Bank of India and Dena Bank are active.

Though banks have sanctioned over Rs 500 crore till March this year, the actual disbursements have been less than Rs 100 crore.

Entertainment industry officials said disbursements have been low because banks still consider it a risky business despite some stiff guidelines formulated by the RBI for the film industry.

An official from ICICI Bank said it has not lent directly to the film industry but has invested in television companies.

The official added that the bank has no plans to invest in the film industry till date. “But we will invest in multiplexes and entertainment parks. In the case of film financing there is hardly any collateral security. So we do not want to enter this sector.”

The same was reiterated by the officials of HDFC Bank.

Banking industry sources said a large portion of funding has gone to broadcasters and multiplexes. About Rs 200 crore has already been lent to this sector and that is because the property is held as a collateral.

According to a study by law firm Amarchand Mangaldas, lending to the entertainment sector can be improved if risks are minimised. This can be done by tailoring insurance products for the sector, issuance of completion bond guarantees and details on budget of the film, its schedule and other pre-sale contracts.

“This year has not seen any big investments by banks or institutions in the entertainment sector. There has been some investments in the multiplexes and entertainment parks,” the banking officials added.

Top
Email This Page