Kathmandu, Dec 28 (IANS) When Shah Rukh Khan's new blockbuster "Om Shanti Om" was released in India and Nepal, it took less than a week for pirated audio and video cassettes to hit the streets here.

The same thing happened with another much-anticipated Bollywood release, Sanjay Leela Bhansali's "Saawariya".

It was not a new phenomenon, nor limited to these two films.

A flourishing racket in pirated Bollywood films has been spanning India, Nepal, Pakistan, the United Arab Emirates and Malaysia, causing both the Hindi film industry and Nepalese cinemas to lose billions of rupees each year.

After mounting complaints by Nepalese cinema owners, who screen Hindi films, Nepal's film authorities have now woken up to the perils of the underground business.

Nepal Film Development Board recently formed a five-member committee headed by debutant film director and board member Shivaji Lamichhane to study the issue and other problems hindering the growth of Kollywood - Nepal's film industry - and come up with solutions.

"The piracy of Bollywood films is not just India's problem, it affects Nepal's theatres as well," Lamichhane told IANS.

"People have stopped going to cinemas because they can watch a newly released film at home by paying much less than the ticket prices."

The committee has tabled a report to the Board, asking it to seek laws with teeth to deter piracy.

It has suggested that all video parlours should be registered or face a shutdown. There should be periodic raids by law enforcement agencies and anyone found dealing in pirated CDs and VCDs could be slapped with a fine of around $3,150 (Nepalese Rupees 200,000) and a jail term of three to five years.