NICOSIA, Cyprus (AP) — Banking officials are warning Cypriot authorities to not dilute legislation aimed at helping banks on the east Mediterranean island nation from getting to grips with their huge bad loan problem.

A source familiar with the situation, who isn't authorized to speak publicly, said Wednesday that proposed amendments "point in the direction" of some watering down to the recently passed legislation that has enabled banks reduce their bad loans.

The source said banking officials are "flashing a light" to Cypriot authorities to avoid actions hindering the banks from further whittling down bad loans.

The ratio of bad loans in the Cypriot banking system stands at 30% of the total, against a 3.8% average in the 19-country eurozone.

In 2013, Cyprus had to be bailed after its banking system ran into trouble.