The subprime mortgage woes are believed to have impacted China as well, but Indian banks seem to have escaped reports CNBC-TV18, since only Indian banks with international branches can invest in foreign debt like credit default swaps and credit linked notes.

ICICI leads, with an exposure of $1.5 billion. SBI has an exposure of $900 million, Bank of India's exposure stands at $440 million, and UTI Bank, now known as Axis Bank, has an exposure of $150 million.

All banks except ICICI say they are invested only in debt issued by Indian companies. ICICI Bank says 75 per cent of its exposure is towards Indian companies, while the balance is towards investment grade US companies.

Following the subprime loan problem, spreads of all swaps have gone up, which means their price has gone down. Indian banks will therefore have to make higher provisions for losses on these swaps, when they mark-to-market their investments at the end of the quarter.

But these will be marginal, compared to the size of their balance sheets.