Moody's lowered Export-ImportBank of India's baseline credit assessment and adjusted baselinecredit assessment while affirming the bank's other ratings.

The rating agency said July 20 that it downgraded the bank'sbaseline credit assessment and adjusted baseline credit assessment to "ba3"from "ba2" and affirmed its foreign currency long-term deposit,issuer and senior unsecured debt ratings of Baa3.

The outlook on all ratings is positive.

The bank's ratings reflect the high probability ofgovernment support given the government's full ownership of the bank and thebank's clear policy role as an export credit agency. Moody's downgradedExport-Import Bank of India's baseline credit assessment due to the sharpdeterioration in its asset quality. The bank's nonperforming loans increased to7.9% as of June 30 from 2.9% as of March 31.

Moody's may downgrade the bank's debt ratings if there aresigns that the bank's links to the government are weakening or if the bank'sasset quality continues to worsen. A downgrade of India's sovereign ratings mayalso add to negative pressure on the bank's ratings.

On the other hand, the bank's ratings could be upgraded ifits financial metrics improve or if the sovereign's foreign-currency debtrating is upgraded.