Greek banks sharply increased their borrowings from the European Central Bank in May to EUR97.5 billion, reversing a four-month downtrend, data released by the Greek central bank showed Friday.

In April, Greek banks had borrowed EUR86.9 billion, as part of a continued emergency lifeline extended by the ECB to banks in Europe which faced liquidity squeezes. In December, that borrowing peaked at EUR97.7 billion.

In May last year, the Greek government narrowly avoided default with the help of a EUR110 billion bailout from the European Union and the International Monetary Fund, but its bonds have since been downgraded to junk status.

Since then, Greek banks have been effectively frozen out of European interbank markets amid fears that a Greek sovereign default would drag down the country's banks.

Greece's four major lenders--the National Bank of Greece SA (NBG), EFG Eurobank Ergasias SA (EUROB.AT), Alpha Bank SA (ALPHA.AT) and Piraeus Bank SA (TPEIR.AT)--have all been under pressure to reduce their dependence on ECB liquidity.

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