ICRA has also reaffirmed the triple-A rating assigned to the existing Rs 500 crore bond issue of Exim Bank and the triple-A rating for the Rs 800 crore medium-term programme consisting of fixed deposits (FDs) and certificates of deposit (CDs). ICRA's rating takes into account the strength that the bank derives from its good asset quality, its investment portfolio and its low gearing.

During the financial year 1997-98, Exim Bank registered an income of Rs 505.15 crore and a profit of Rs 201.6 crore representing a growth of 16 per cent and 33 per cent respectively over the previous year. Exim Bank's profitability during 1997-98 increased mainly on account of higher yielding direct finance programmes.

The disbursements during 1997-98 stood at Rs 1,370.40 crore representing a growth of 9 per cent over 1996-97. ICRA has said that Exim Bank continues to maintain good asset quality with a well-diversified portfolio and a substantial portion of its export credit exposure is backed by guarantees from the ECGC, which is a source of security.

Though Exim Bank's exemption from income tax would go from the current year, ICRA has said that this is unlikely to materially affect the cash flow position of the bank. Exim Bank's future growth would be dependent on the growth of the economy, ICRA has said.

The rating agency has downgraded the FD programme of Coimbatore Lakshmi Investment & Finance Company (CLIF) from A- to C. CLIF's reliance on FDs is in excess of the RBI prescribed norm of 0.5 times of its networth. This, coupled with increased quantum of foreclosed deposits has placed CLIF's liquidity under strain.

Meanwhile, the Credit Rating Information Services of India Ltd (Crisil) has removed the debt programmes of Usha Beltron Ltd from rating watch. Crisil had put the ratings assigned to the various debt programmes of the company on rating watch with developing implications following the announcement of the merger of another group company -- Usha Martin Industries Ltd -- with itself in November, 1997.

The rating agency has removed two NCD programmes amounting to Rs 70.82 crore from rating watch, but has downgraded Usha Beltron's FD programme to FA from FAA- and a Rs 20 crore NCD programme to A- from AA-.