To improve flow of cheaper funds into key infrastructure sectors, the Reserve Bank of India on Tuesday eased the norms for external commercial borrowings (ECBs) for the aviation and housing sectors.

"The RBI has extended the ECB relaxation for affordable housing, which was there for one year to two more years now, and for the aviation sector for a few more months," said RBI deputy governor HR Khan after a meeting of the high-level committee on ECBs, which is chaired by the secretary, department of economic affairs. However, there has been no change in the overall ceiling of $40 billion for ECBs, Khan said.

Additionally, the central bank will soon also come out with a uniform definition for the infrastructure sector, which has been a long pending demand of private players.

The move, is expected to help firms engaged in core sector projects to access funds more easily and help restart the economy's growth engines. An estimated $ 1 trillion of investments is required in the infrastructure sector during the Twelfth Five Year Plan period.

The fresh measures come after the RBI had in December last year allowed real estate developers and housing finance companies to raise $1 billion through ECBs in 2012-13 in order to promote low cost housing projects.

The funds raised through ECBs could be used either for developing low-cost housing projects or for providing loans up to Rs 25 lakh to individuals for buying units with a price tag of Rs 30 lakh or less, the RBI had said in a circular.

For the aviation sector, the RBI had in April 2012 permitted raising working capital up to $1 billion through the ECB route. Of this, individual companies could raise $ 300 million each in a year. (Indian Express)