IndusInd Bank is looking at film financing as a prospective business area.
According to Bhaskar Ghose, managing director of the bank, "the promoter - Hindujas - were major financiers of Raj Kapoor films. Based on that expertise, we are looking at film financing as a business opportunity." Ghose, however, said the bank has not taken any final decision on the issue. He was speaking on the occasion of the opening of the 39th branch of IndusInd Bank at Lokhandwala, in Mumbai.
"There are two reasons why film financing is attractive to us. First, other banks have not made their entry. Secondly, the rate of interest of existing film financing bodies are quite high and we hope to tap the market easily by offering a lucrative interest rate," he said.
IndusInd Bank, as and when it makes its film financing foray, will offer finance to selective banners. "It will be mainly those film producers who are well known to the group," Ghose said.
According to the Reserve Bank of India (RBI) guidelines, finance of only 35 per cent to 40 per cent of the project cost of a film is allowed, except for deserving cases where the amount could be increased up to 50 per cent of the project cost.
The apex bank guidelines also say that banks are not allowed to finance any film with more than Rs 10 crore of project cost.
"As per the RBI norms, no bank is permitted to finance very big budget films. However, one should remember that big budget films are not always the most successful ones," Ghose said.
According to Ghose, the bank is looking more and more into the retail banking. "We started off as a wholesale bank, but are now planning to get into retailing in a big way. We are also planning to expand our branch network," he said. The bank, which at present has a branch strength of 39, plans to increase it to 100 by the fiscal-end. The bank already has seven new branch licenses and will be applying for more.
In the wholesale banking sector, Ghose said the top-tier companies will be the major thrust area. "So far, we have been looking at small and medium corporates, but are now planning to target the big ones as well."
