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Financing by Banks: (IDBI):

Objective

To provide finance for production of feature films as defined under the Cinematograph (Certification) Rules, 1983. Advertisement films, short films, documentaries, etc. are not eligible for financing

Eligibility

A corporate entity, promoted by reputed producers, backed by established directors & other technicians and possessing satisfactory track record. In case the entity is recently corporatised, track record of the main promoter(s) is considered

Extent of Assistance

  • Not less than Rs.2 crore
  • Not exceeding 50% of the estimated cost of the film.


    • Promoters` Contribution Not less than 30% of the estimated cost of the film.

    A part of the equity contribution (not exceeding 20% of the estimated cost of the film) may be raised in the form of advances from distributors against sale of territories, music/video rights, etc.

    Debt-Equity Ratio Not to exceed 1:1

    Interest Rate Cap-rate in the prevailing interest-rate band.

    Up-front fee 1% of the quantum of assistance.

    Repayment Normally within a period not exceeding two years. The schedule of repayment decided on case-to-case basis depending upon the timing and quantum of sale proceeds from distribution agreements/music rights etc. and expected streams of cash inflows

    Security
  • Letter from film processing laboratory conveying rights on the negatives of the film in favour of IDBI

  • Assignment of all agreements and Intellectual Property Rights (IPRs) in favour of IDBI. IDBI to have right of negotiation of valuation of all IPRs

  • A Trust & Retention Account (TRA) will be maintained for all capital as well as revenue inflows and outflows. The receivables on sale of all IPRs shall be credited to TRA. The modalities of TRA will be worked out to the satisfaction of IDBI. A No Objection Certificate (NOC) from all concerned parties for the TRA arrangement will be required. IDBI shall have first charge on the TRA

  • First hypothecation charge on all the tangible movable assets under the project

  • Personal guarantee(s) of the producer(s)

  • Assignment of existing rights like music, video, internet, CD, DVD rights, library of old hit films, etc.

  • The film to be comprehensively insured

  • The borrower would be required to obtain completion bond guarantee from such agencies. Till such time the guarantee is made available, the risk in this regard would need to be mitigated suitably to the satisfaction of IDBI.


    • Procedure for Sanction of Assistance The complete application will be submitted by IDBI to an Advisory Committee for screening the proposal for financing. Wherever necessary, IDBI may refer the proposal to a group of experts for guidance and expert advice. The borrower will enter into an agreement with IDBI, after it has conveyed its acceptance of the terms and conditions of sanction communicated by IDBI

    Disbursement Expenses during the pre-shooting stage to be met from the promoters` contribution. The assistance from IDBI will be disbursed during shooting and post-shooting stages.

    Amount of disbursement will depend on the total budget of the film, progress and shooting/processing of the film, drawal schedule and timing of the equity contribution, compliance of various terms and conditions of the letter of sanction

    Monitoring IDBI to have the right of appointment of specialised agencies for monitoring the timely shooting/processing of the film and assessing the reasonableness of the expenditure incurred, etc.

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