Responding to the government\u2019s suggestion that overseas borrowing norms be relaxed, the Reserve Bank of India (RBI) on Tuesday eased the rules under the ECB (external commercial borrowing) framework. The new rules will make it slightly cheaper for Indian companies and banks to tap the debt markets overseas. In recent months, the cost of borrowings in markets abroad has gone up, partly because of the spike in interest rates in the US and also because the spreads have widened, especially for companies in the emerging markets. In September, ECB borrowings totalled $1.7 billion, far lower than the $4.8 billion raised in August. In July, the borrowings were $2.2 billion. The central bank has reduced the minimum average maturity requirement for ECBs in the infrastructure space, raised by eligible borrowers, from currently five years to three years. The hedging rules have also been relaxed. The RBI said in a release, the existing norms had been reviewed and amended in consultation with the government. From now on, borrowings of above five years will be exempt from the mandatory hedging provisions. Currently, borrowings of above 10 years do not need to be hedged. Accordingly, the RBI explained, ECBs with a minimum average maturity period of three to five years, in the infrastructure space, will have to comply with the 100% mandatory hedging requirement. The central bank further clarified that ECBs falling under the revised criteria but raised prior to the date of this announcement will not be required to mandatorily roll-over their existing hedges. These rules are applicable to eligible borrowers raising foreign currency denominated ECBs under Track I. Also Read:\u00a0Raghuram Rajan speaks: RBI is seat belt if Centre the driver, says former Reserve Bank of India Governor\u00a0 On October 3, the RBI had announced liberalisation of the ECB policy for public sector oil marketing companies (OMCs) for working capital purposes, wherein, the three OMCs could borrow up to $10 billion subject to conditions. Under the earlier policy, ECB could be raised for working capital purposes from direct and indirect equity holders or from a group company, provided the loan was for a minimum average maturity of five years. Under the new provision, OMCs can raise ECB for working capital purposes with minimum average maturity period of 3\/5 years from all recognized lenders under the automatic route.