By Siddhi Nayak and Bharath Rajeswaran

MUMBAI/BENGALURU (Reuters) - Indian banks' loan exposure to the embattled Adani Group seems "manageable" and any credit risk in the aftermath of its billionaire founder-chairman's indictment in the United States looks "contained," JPMorgan said on Friday.

U.S. prosecutors have charged Gautam Adani, one of the world's richest people, and seven other people with paying $265 million in bribes to Indian government officials for contracts, including to develop the country's largest solar power plant.

Adani Group has said the accusations are "baseless" and that it will seek "all possible legal recourse".

Shares of Indian state-owned banks fell 2.7% on Thursday over worries about the extent of their exposure to the ports-to-power conglomerate that spans about 10 listed companies in all.

However, JPMorgan analysts said Indian banks' exposure to the group was around 0.3% of outstanding loans as of March and that the loans were backed by asset cover.

"We don't see major credit risk as the underlying companies are not implicated," the Wall Street brokerage said in a note.

Moreover, Indian banks' exposure to Adani Green, which is at the centre of the allegations, is "materially lower" at just six basis points of banking system credit as of September, JPMorgan said.

"We do not see any systemic risk to Indian financials from a potential credit event in Adani Green, given the low exposure, asset cover, improving operating performance of the broader Adani Group and the capital and standard asset buffers at banks," the investment bank said.

While credit risk to banks may be contained, sources told Reuters that global and local banks may now limit fresh funding.

Four local bankers that Reuters spoke to said they would take a wait-and-watch approach and that any fresh funds would likely be at higher interest rates due to the increased risks.

"Loan pricing is expected to go up, but we will wait and watch for at least 3-4 months before we initiate any fresh funding request," said an official at a private lender that has exposure to the Adani group.

The lender's internal assessment shows the Adani group has the ability to repay loans and their cash flows remain strong, the banker said, asking not to be identified as he is not authorised to speak with the media.

Shares of Indian state-owned banks rebounded on Friday.

(Reporting by Siddhi Nayak and Bharath Rajeswaran; Editing by Savio D'Souza)