TALLINN - The amount of overdue loans in Estonia fell in March to 11.8 billion kroons ($1.20 billion), or 4.7 percent of the total loan portfolio, down from 5.3 percent the month before, the central bank said on Wednesday.

Estonia's banking sector is 95 percent controlled by four Nordic financial groups. Swedbank and SEB are the market leaders. Investors are watching closely to see whether Estonia's slowdown leads to problems for banks.

Though total loans outstanding dipped, loans overdue for more than 60 days rose in March to 2.15 billion kroons from 2.06 billion in February, the central bank said in a statement.

Moody's rating agency recently gave Estonia's banking sector a negative outlook due to a growing risk of a decline in asset quality and liquidity.