Finance minister Nirmala Sitharaman on Friday said she did not expect the ongoing controversy around Adani Group to affect investor confidence as India's banking system is sound and the financial markets are "well regulated," according to media reports.

Shares of Adani Group companies have nosedived in the last seven sessions, after an adverse report by Hidnenburg Reaearch which alleged accounting manipulations by the group.

Sitharaman said that the State Bank of India (SBI) and Life Insurance Corporation (LIC) of India have already explained that they are not overexposed to Adani Group stocks.

"They have very clearly said that their exposure (to Adani Group stocks) is very well within the permitted limits and with valuation falling as well, they are still over profit. That is the word from the horse's mouth," Sitharaman said. She also highlighted that India remains "an absolutely well governed" country and a "very well regulated financial market."

"One instance, however much talked about globally, I would think it is not going to be indicative of how well Indian financial markets have been governed," Sitharaman said.

Sitharaman said public sector financial institutions had released detailed statements showing they had limited exposure to Adani Group and would not be significantly affected by the share crash.

"I think the investor confidence which existed before shall continue even now," she added.