After almost a year of curbs and restraint advices to corporates, the government is set to ease the external commercial borrowings window for India Inc.

The finance ministry put forth its case for "straightening" the policy in favour of corporates in the quarterly review meeting of the high-level committee on ECBs in North Block.

Senior finance ministry officials said the government had earlier favoured corporates accessing the local market given the large foreign exchange reserves and the surplus liquidity with Indian banks.

However, it is now being felt that the corporates have a legitimate demand for cheaper funds from international borrowers.

The officials said no final decision was taken in today's quarterly review. "The relaxation was discussed with the Reserve Bank of India. We have called for another meeting within the next 7-10 days to change the policy," said an official.

The meeting was attended by RBI Executive Director Vepa Kamesan and Joint Secretary (Capital Markets and ECBs) in the finance ministry UK Sinha. Finance Secretary DC Gupta was briefed later in the day.

Several corporates, including Reliance Industries, had approached the finance ministry seeking its nod for raising ECBs.

Reliance's application was for borrowing $500 million abroad. The ministry had advised all these corporates to approach Indian banks.

At present, all ECB applications for over $100 million need to be approved by the finance ministry. The RBI approves ECB applications for $50-100 million.

The ministry, however, recently allowed ICICI Bank to raise $300 million abroad as part of a steel debt restructuring package.

The officials said till a final view was taken, the existing policy would continue. RBI Governor YV Reddy was also expected to be present in the meeting to be convened shortly, they said.

In the queue

• Reliance Industries: $500 mn
• Essar Steel: $200 mn
• Jindal Vijaynagar: $225 mn
• Ispat Industries: $225 mn