The surplus funds held by households and nonprofit institutions dropped as they increased borrowings but cut their investments in stocks and bonds," the central bank said in a press release.Nonprofit institutions refer to organizations serving households, such as consumer groups, charity and relief organizations, religious groups and labor unions.

Excess funds held by the government came to 34 trillion won in 2016, up from 20.1 trillion won.

Meanwhile, the central bank said total financial assets in the country came to 15,439 trillion won at the end of 2016, up 5.8 percent from a year earlier.

Out of the total, assets held in cash and deposits increased 6.6 percent on-year to 2,982 trillion won.

Total loans came to 2,756 trillion won in 2016 from 2,553 trillion won from a year earlier due to a steep rise in household debts.

South Korea's outstanding household credit -- which is composed of household loans and credit card spending -- came to 1,344.3 trillion won at the end of 2016, up 11.7 percent from a year earlier. (Yonhap)