MUMBAI, Oct. 4 -- The central bank has proposed a sweeping liberalization of the external commercial borrowing framework, removing cost caps, widening eligibility, and tying fundraising limits to financial strength to make it easier for Indian firms to access foreign funds. Under the Reserve Bank of India's (RBI's) new proposals, companies would be allowed to raise funds through ECBs up to $1 billion in a financial year or up to 300% of their net worth, whichever is higher, substantially more than the current ceiling of $750 million. The shift from a fixed monetary cap to a lever tied to net worth is designed to better align borrowing capacity with actual balance sheet strength. A key change is the elimination of cost caps on ECBs. Previously, RBI mandated a maximum spread of 450 basis points over the benchmark for foreign-currency ECBs, and similarly over government securities yield for rupee-denominated ECBs. Under the proposed regime, interest rates and spreads would be based on market-determined levels, giving borrowers and lenders greater flexibility. The changes are a positive development for Indian companies looking to raise cheaper funds overseas. Governor Sanjay Malhotra had said during Wednesday's monetary policy that the RBI would make certain changes to ECB rules. Another important proposed change is in the maturity and end-use rules of ECBs. The central bank has proposed shortening the minimum maturity requirement for most sectors to a floor of three years. But for manufacturing companies, maturity between one and three years may be allowed....