The Reserve Bank has warned that the global financial crisis can spread to India through equity and forex markets, while money, debt and credit markets could be impacted indirectly due to the continuing onslaught.

However, the country may escape the worst consequences of the crisis, even as "the equity and the forex markets  provide the channels through which the global crisis can spread to the Indian system," RBI Governor D Subbarao said in Washington on Saturday.

Speaking at the International Monetary and Financial Committee Meeting of the Fund, he said the other three segments of the financial markets which could get affected indirectly are money, debt and capital markets.

He added that the cost of borrowings have increased for India Inc because of factors like risk aversions, deleveraging and frozen money markets, which is also affecting the availability of funds in the international markets.

Subbarao, who took charge as RBI Governor last month when the financial crisis was unfolding, said that the unavailability of funds in the international markets will mean additional demand for domestic bank credit in the near term.

Referring to capital flows, he said reduced interest of investors in emerging economies could impact capital flows "significantly" and the looming recession will impact Indian exports.

India's exports during the first five months of the current fiscal registered a growth of 35.1 per cent to $81.2 billion as against 60.1 billion dollars in the same period a year ago.

In the capital market, FIIs have net pulled out $10.05 billion in 2008 so far, while they have net pumped in $2.15 billion in the debt market, according to SEBI figures.

Subbarao said emerging economies, which do not have direct or significant exposure to stressed financial instruments and troubled financial institutions are experiencing the indirect impact of the crisis.

He said that the impact is "by no means insignificant or trivial. Indeed, it could intensify in the months ahead."

Quoting a study, RBI Deputy Governor Rakesh Mohan had said earlier that there was no evidence of any direct impact on India on account of exposure to the sub-prime markets.

However, a few of banks did suffer some impact on account of the mark-to-market losses. These were caused by widening of the credit spreads arising from the sub-prime episode on term liquidity in the market, even though the overnight markets remained stable, he had said.

Earlier, a Finance Ministry official had said the Indian banking sector saw an MTM loss of about Rs 410 crore due to their investment in instruments of troubled US financial giants such as Lehman Brothers and AIG.

ICICI Bank accounted for three-fourths of the losses. Some state-owned banks had exposure in the instruments of these troubled US financial institutions, the official had said.

However, most of Indian banks' exposures are to those Lehman Brothers' subsidiaries which have not filed for bankruptcy, Rakesh Mohan had said.