MUMBAI, Dec 18: Crisil, the leading rating agency, on Thursday downgraded the fixed deposit programme of DSJ Finance Corporation to `FD' (the default category) one week after the Reserve Bank of India banned the company from accepting fresh deposits.

``Normally the downgrading in such extreme cases should have come before the RBI banned the company from raising fresh deposits. There were reports about defaults by DSJ in the last six months,'' said a source. RBI, while banning the company on December 11, had said DSJ violated various directions regarding SLR requirements, submission of return to the RBI and concentration of investment in group companies. The capital adequacy of the company was also negative.

According to a Crisil statement on Thursday, DSJ Finance's performance has been affected due to high delinquencies on its plant and machinery portfolio, poor performance of group companies and funds being blocked in real estate investment which has strained the liquidity position of the company. It may be recalled that another rating agency had given a good rating to CRB Capital Markets just before the scam surfaced. It was downgraded after the scam broke out and investors suffered huge losses. ``A change in rating is a signal to investors about the financial strength of the company in general,'' said a banking source.

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