The Bank of Korea has come under fire for an error in its statistics on household loans extended by savings banks at a critical time when mounting household debt is cited as a major risk to the economy.

On Thursday morning, the central bank released an embargoed report to the media that said household debt at savings banks increased by 977.5 billion won ($852.5 million) in January from the previous month. The number was considered extraordinarily large because the monthly growth figure has usually been between 100-430 billion won for the previous five months.

After the embargo was lifted at noon, the Korean media called the sudden growth of household debt a “balloon effect,” saying primary lenders’ tightening of loans prompted people to borrow from secondary banks.

At around 4:30 p.m., however, the BOK corrected the number to 508.3 billion won, saying it should have taken out 469.2 billion won of farming capital, which had not been included in household debt data until last year.

When officials at the BOK’s monetary and financial statistics division received the 977.5 billion won figure from the Korea Federation of Savings Banks, they reportedly failed to double check the numbers and question the reason behind the sudden surge of household debt by almost 1 trillion won at savings banks.

In response to the critical error and miscommunication with the KFSB, BOK Gov. Lee Ju-yeol ordered the replacement of the financial statistics division head and the removal of the title of the team. He gave a warning to the director of the economic statistics department as well.

It is extremely rare for the BOK to publicly punish its officials for wrongdoings.

“At an executive meeting yesterday, he called this incident a ‘very grave issue’ that can affect the credibility that the BOK has cherished for a long time. He also punished the statistics division as well,” said Jeon Seung-cheol, deputy governor of the BOK, at a press conference.

“To prevent an incident like this from reoccurring, we will scrutinize the procedure of statistics formation and the process of the statistics release. We will also enhance our communication with the KFSB.”

The issue is serious for the BOK because Lee for months has been stressing the need to curb household debt, which reached 1.34 quadrillion won as of the end of 2016, or about 83 percent of gross domestic product.

BOK officials said the bank has not decided yet whether to include farming capital in household loans at savings banks or to stick to its old rule, adding that the BOK needs more time to discuss the matter with related financial authorities such as the Financial Supervisory Service.

By Kim Yoon-mi (yoonmi@heraldcorp.com)