The Bank of Greece and the Hellenic Bank Association on Tuesday met to discuss the problem of outstanding loans in the domestic banking sector.

Nikos Garganas, the governor of the Bank of Greece, urged Greek bankers to intensify efforts to cut the current 6 percent rate of delayed loans to around 3 percent to 3.5 percent, currently the EU average.

The problem with delayed loans is a "hot topic" in Greek banking sector, not only because of the high rate recorded by Greek banks, but also because of a new regulatory framework implemented by the Basel II rules. The new framework calls on financial institutions' board to determine the ceiling of accepted delayed loans and to report it to the central bank.

The central banker also urged Greek banks to adopt a unified system of recording bad debt in their quarterly balance sheets.

Under International Accounting Standards, banks are not obliged to record interest on loans delayed for more than six months.

The Bank of Greece also called on local banks to implement a more efficient control of pricing of services, such as credit transfer payments and commissions.