Loan guarantees among affiliates of South Korea's large business groups sank in 2016 from a year earlier, the country's corporate watchdog said Wednesday.

The total corporate debt payment guarantees made among units of 27 conglomerates reached 321.2 billion won ($274.5 million) as of April 1, down 24.8 percent from 426.9 billion tallied a year ago, according to the Fair Trade Commission (FTC).

The total number of conglomerates eligible to make loan guarantees fell from last year's 61 following the implementation of a new antitrust law in September that puts companies with assets of 10 trillion won or over on the FTC watch list.

Those under FTC surveillance are restricted from making equity investments or offering loan guarantees to one another.

The FTC said five companies were engaged in in-house loan guarantee practices -- Hyundai Department Store, Hanjin, GS, Doosan and Hyosung.

Such cross-loan guarantees have been banned in Asia's fourth-largest economy since 1998, as they were regarded as one of the main reasons that brought about the 1997 Asian financial crisis. (Yonhap)