The 70-page report, prepared after a year of study under the chairpersonship of K Kannan, deputy chairperson of the IBA and chairperson and managing director of the Bank of Baroda with the assistance of representatives of the Film Federation of India, makes it clear that advances given by banks are aimed at replacing private financiers. The report, though, isn't binding on the member banks, and the IBA has also left it to the banks to decide the means of finance after their risks are covered.

According to the report, finance should also be extended to documentaries, TVserials, the audio-video industry as well as other industry related infrastructure like studios, laboratories and hiring of equipment. Regarding financing film production, IBA has suggested that the rate of interest may be decided by the financing banks individually. Banks have been asked to give advances on the lines of those given by the National Film Development Corporation. Banks have also been advised to obtain insurance cover and engage industry specialists or consultants to evaluate proposals for financing for which the costs will be borne by producers.

Since there are big, medium and relatively new producers, banks should consider each case individually. Producers would have to submit a detailed budget for each film to be financed. The bank advance should preferably not exceed 40 per cent of the total project cost, and tangible security could be about 50 per cent of the bank loan. Borrowers should be able to establish their credibility and professional competence. Producers would be required tobring in at least 25 per cent of the project cost as promoters' contribution. The maximum period for which the film may be financed would be up to the release of the film. For Hindi films, this period may be restricted to 12 to 18 months, while for regional films, it will be between six and 12 months.

The IBA has also suggested that banks should obtain a laboratory letter conveying rights on the negatives, collateral security in the form of personal assets, deposits or other acceptable assets, guarantees and mortgage of immovable properties.

Since the risk factor is high in the distribution sector, banks should ask for collateral securities by way of personal guarantees or equitable mortgages of properties.

IBA has also suggested that banks should confine their involvement in cinemas to the acquisition or construction of new cinemas or cinema complexes or the renovation, expansion or modernisation of existing theatre complexes.

Though the then Information and Broadcasting Minister Sushma Swaraj haddeclared on May 10 last year that the film industry would be given industry status, the Central Government is still to issue a notification to this effect.