Madras High Court to Review Legality of 30% Interest Charged by Film Financiers
The Madras High Court has decided to examine the legality of film financiers charging interest rates as high as 30% on loans given to producers and others in the Tamil film industry. A Division Bench of Justices S.M. Subramaniam and Mohammed Shaffiq observed that such interest rates appear prima facie exorbitant and usurious, warranting judicial scrutiny. The court was hearing a case involving disputes over loan recovery and allegations of exploitative lending practices within the industry. The Bench noted that while financiers play an important role in supporting film production, lending must comply with legal and ethical standards to prevent undue hardship to borrowers. The judges directed that relevant documents be submitted for review and indicated that guidelines may be necessary to regulate interest rates in the sector. The issue has sparked concern within the industry, where several producers have long complained about high-interest loans leading to financial strain and litigation.
