In a bid to provide companies with easier access to cheaper funds for key infrastructure sectors, the Reserve Bank of India (RBI) on Tuesday relaxed external commercial borrowing (ECB) norms.

The central bank said it extended the ECB relaxation for the housing sector from one year to two more years and for the aviation sector by a few more months.

Announcing the decision, RBI Deputy Governor H R Khan said, "The RBI has extended the external commercial borrowing (ECB) relaxation for affordable housing which was there for one year to two more years (now) and aviation for a few more months."

Mr. Khan was speaking to reports after attending a meeting of the high-level committee on ECB, which was chaired by Economic Affairs Department Secretary Arvind Mayaram.

The central bank, however, made no overall change in ECB limit, which is current at US$40 billion.

Earlier in December last year, the RBI had permitted housing finance firms and real estate developers to raise up to US$1 billion via ECBs to promote low-cost housing projects. The central bank had also permitted civil aviation sector to raise capital through the ECB route.

ECBs are increasingly gaining popularity as cost of raising loans overseas is considerably lower than that of domestic borrowings.