The combined non-performing loan ratio among China's commercial banks dropped to 7.5 percent at the end of June, down from 8.6 percent at the beginning of the year, amid signs a campaign to improve risk controls may be making progress, Washington Post reported. The outstanding value of sour loans at lenders including state-owned, joint-stock, city, rural and overseas lenders, was cut to 1.28 trillion yuan (US$160 billion) at the end of June, down 43.5 billion yuan in the first half, according to the China Banking Regulatory Commission. Banks have come under increasing pressure to cut lending to projects deemed redundant or financially risky as the government attempts to reduce excess investment that it says could spark a financial crisis, said the paper. China's banks have written off billions of dollars in irrecoverable loans and revamped their management to help improve their competitiveness ahead of a full opening of the banking sector to foreign competition later this year. But experts warn the banks could face a rebound in bad debt if they fail to improve their risk management.