The global financial turmoil will not have any significant impact on the country's financial system as India is not exposed to the new and innovative financial instruments that triggered the meltdown, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Friday.

"We have not been as exposed to these new and innovative instruments, which have been the source of financial distress internationally... so I do not think that direct impact on the Indian financial system is going to be significant at all," Ahluwalia told reporters.

His comments come just a day after Finance Minister P Chidambaram said Indian banks are largely insinuated from the US financial crisis.

Pointing out that the Indian financial system is quite stable, Ahluwalia said, "there will be indirect effect because if the rest of the world gets disturbed and capital flows and liquidity shrinks, there is bound to be spillovers not just on India but all over the world".

In every country, he added, regulators are trying to assess the situation and taking steps to insulate the their economies from the unnecessary shock.

As regards to India, he said, the country is fortunate to have large foreign exchange reserves and hence it would be able to tide over any short-term disruption in capital inflows.

The global financial crisis triggered by the sub-prime mortgage crisis in the US has resulted in collapse of the iconic investment bank Lehman Brothers and has also prompted the US administration to come out with a bailout package totalling about $900 billion to save other entities from slipping into bankruptcy.