Agrees Reliance Entertainment vice-chairman, Mr Amit Khanna:"Corporatisation and professionalism would have happened anyway. Thisincident will act as a catalyst for change."

The immediate effect will be on movies financed by Mr Shah. Around 11projects financed by him are at different stages of production and the valueof these projects is placed at over Rs 100 crore. The worst-hit will beDevdas, for which a Rs 11-crore-set has already been constructed. With thisrecent development, the fate of these projects looks uncertain for themoment.

For sometime now, there has been a need to evolve a systematic and a moreorganised method by which money for films can be raised. In fact, this issuehas been brought up only because money has been coming in from a variety ofsources.

The Joint Institutional Committee on Financing Entertainment Industrypresented a report late last year on the norms for film financing. Thecommittee was headed by the Department of Banking, Ministry of Finance, andleading financial institutions like IDBI and IFCI were its members. Thoughthis should have set the ball rolling for film producers to obtain finances,the requirements for obtaining finance are not completely devoid ofcomplications.

Banks and FIs have laid down conditions under which film financing will takeplace. The Joint Committee clearly states that the financial institutionsshould extend finances only to corporate entities. This leaves just ahandful of producers who are eligible for funding. Besides, a producer willhave to show collaterals against the loans which he will take. At thisstage, producers show only negatives as a collateral. Therefore, revenuesearned by producers from the sale of satellite and music rights are neverrevealed. Says Mr Taran Adarsh, film critic and editor, Trade Guide: "Thereare far too many procedural issues involved in procuring a loan from thebanks and FIs."

Will institutional financing be required at all? Not quite since there isactually no dearth of finance in the market today. The revenue model seemsthe perfect answer to the question. According to Mr Adarsh, astronomicalsums have been earned by producers by selling rights for satellitetelevision, overseas distribution and music. "This is for most movies andnot restricted to ones with large budgets" he adds.