Banks including the country's largest microfinance lender, Bandhan Bank, account for about 45% of the sectoral bad loans, industry sources said. Banks account for about 34% of the microfinance loan outstanding of Rs 3.52 lakh crore. "There has been a substantial reduction of NPAs in the overall microfinance portfolio during the quarter. The reduction seems to be due to improved collection of past dues and bad loans write-off," Sa-Dhan executive director Jiji Mammen told ET.