Air India (AI) is mopping up these funds from the foreign market to meet its working capital requirements. ECB is a fund raising instrument which allows firms to access overseas money.

"Air India has received proposal from several interested banks and financial institutions. We are evaluating them but at this stage offer from Citibank-SBI looks quite attractive and we may tie-up with them," sources said.

The sources said that Citibank and SBI had jointly participated in Air India's invitation for offer to raise up to USD 300 million through the ECB window last month.

The last date for submission for offer, which was initially April 27, has been extended to May 4. "Once the proposal is finalised, we will sign a term-sheet, which would allow us avail the funds immediately," they said.

Air India had on April 9 floated international tenders for raising up to USD 300 million through ECB window.

The funds tapped via this instrument would be guaranteed by the Government of India and interest rate is fixed or floating linked to Libor (London inter-bank offered rate), Air India had said in offer for invitation document.

Reserve Bank of India (RBI) had for the first time in April 2012 allowed the civil aviation sector to raise funds via the ECB route for a period of one year.

The ceiling for the entire civil aviation sector to raise funds through ECB route currently stands at $ one billion, and the maximum permissible ECB limit for an individual airline is USD 300 million.

The funds raised through this route can be utilised for working capital as well as for refinancing the outstanding working capital rupee loan availed of from the domestic banks.

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