Greece's finance ministry Tuesday said it would extend a further EUR30 billion in aid to the country's private lenders, but said it wanted the banks to detail how they would cover their future financing needs and what they would do with that additional aid.

In a statement, the ministry said it would submit legislation shortly to expand Greece's existing bank support fund with a further EUR30 billion in loan guarantees.

"The guarantees referred to will be provided on the condition that every credit institution prepares and implements a medium-term plan to cover its financing needs," the statement said.

The guarantees, which are included as part of Greece's official bailout deal with the European Union and International Monetary Fund, represent the latest injection by the Greek government into the country's banking system.

Since late 2008, the government has provided a total of EUR55 billion in guarantees and other support to Greek banks, modeled on similar programs adopted in the rest of Europe at the start of the financial crisis. Although generally regarded as well capitalized, the Greek banks face difficulties borrowing on interbank markets because of their heavy exposure to Greek government bonds.

Greece's four main banks--the National Bank of Greece SA (ETE.AT, NBG), EFG Eurobank Ergasias SA (EUROB.AT, EGFEY), Alpha Bank (ALPHA.AT, ALBKY) and Piraeus Bank SA (TPEIR.AT)--hold a combined EUR40 billion in Greek government bonds, representing on average a little more than 10% of their assets.

As a result, the banks have become heavily dependent on the European Central Bank for their cash needs. According to the latest data from the central bank, the Bank of Greece, Greek banks borrowed EUR97.7 billion from the ECB in December, up slightly from EUR95.05 billion a month earlier, but almost double what they borrowed a year earlier.

At the same time, Greece's banking system has seen a slow but steady outflow of deposits over the past year. Total deposits in the Greek banking system have shrunk 12% to EUR204.8 billion in the 12 months through January.

The latest EUR30 billion in aid being offered by the Greek government would guarantee senior debt issued by the banks. The banks could then post that debt as collateral with the ECB in order to borrow more cash as needed.

Even so, Greece's biggest lenders have come under pressure recently from the ECB and the Bank of Greece to reduce their dependence on ECB funding. According to senior officials at Greek banks, the country's lenders are expected to put forward a plan that would pare back that dependence over the next two to three years.

Although the details will vary from bank to bank, the measures would include further cost-cutting, scaling back lending, attracting fresh depositors, and selling off fledgling foreign operations where there is a gap between deposits and assets.

In February, for example, Greece's second-largest lender by assets, Eurobank, sold a 70% stake in its Polish operations to Austria's Raiffeisen Bank International AG (RBI.VI, RAIFY) in a move to save itself some EUR2 billion a year in cash.

According to the finance ministry statement, the liquidity plans put forward by the banks would need to be approved by the Bank of Greece and the ECB, in conjunction with the European Commission and the IMF.

-By Alkman Granitsas, Dow Jones Newswires; +30 210 331 2881; alkman.granitsas@dowjones.com