Mortgages climbed 3.1 trillion won on-month to 557.7 trillion won in August, while other bank loans, including lending through an overdraft line of credit, jumped 3.4 trillion won on-month to 185.7 trillion won.

The BOK partly attributed the other increased bank loans to the launching of two Internet-only banks.

Internet banks have gained popularity among South Koreans as the banks offer services ranging from ordinary deposits to loans without face-to-face contact with customers and without bank branches.

The hike came despite the government's tightened lending rules meant to curb rapidly growing household debt.

South Korea's overall household debt came to 1,388.3 trillion won as of end-June, up 10.4 percent from a year earlier, according to data compiled by the BOK.

In August, banks' outstanding corporate loans came to 773.8 trillion won, up 2.9 trillion won from the previous month. (Yonhap)