The Reserve Bank of India (RBI) has withdrawn the $2m ceiling on banks for film financing, opening the way for much-needed boost to industry investment.

The RBI stated that banks should fix an overall exposure limit to the film industry and ensure that advances are distributed over a number of films to spread the risk.

Indian Producers are expected to provide 25% of the budget and the RBI specified that banks should disburse funds only after this contribution has been received. In addition, the loan period may be based on individual banks' assessment .

Industrial Development Bank of India (IDBI) and Bank of India have already established film funds upwards of $35m and TV networks like B4U are in the process of setting up corporate finance for local films.

Indian film companies including Zee Telefilms, Mukta Arts, Pritish Nandy Communications, AdLabs, UTV Motion Pictures and Balaji Films are already listed at the Stock Exchange. The Hinduja Group and TATA recently announced plans to enter Bollywood film financing.