North Korea's defence ministry on Tuesday denied it carried out a cyber-attack on one of South Korea's largest banks, calling allegations that was behind last month's hacking "absurd" and a "farce".

South Korean prosecutors say the North brought down the computer system of the National Agricultural Cooperative Federation, or Nonghyup, by hacking into an official's laptop and operating it remotely as a "zombie computer".

In a statement to the official Korean Central News Agency the North said Seoul's accusation was "just absurd argument based on unreasonable ground," and an "anachronistic anti-DPRK (North Korea) farce and charade."

Citing an unnamed defence ministry spokesman, the statement demanded Seoul "discard its bad habit of finding fault with others", decrying the incident as "one more farce staged against the nation."

The attack on Nonghyup, which has about 5,000 branches, left thousands of customers unable to access their money for three days, prompting South Korea to demand its rival stop "reckless cyber-terrorism".

South Korea said the North had planned the "unprecedented cyber-terror" to wipe out all data in Nonghyup's computers using IP addresses and codes from an overseas computer server identical to those it had used in previous attacks.

Pyongyang, citing unnamed experts, said the IP addresses came from the United States, Japan or South Korea.

The system crash that started on April 12 left Nonghyup customers unable to withdraw or transfer money, use credit cards or take out loans.

It temporarily deleted records of some of Nonghyup's 5.4 million credit card customers, leaving Nonghyup unable to bill customers or settle payments to retailers. Services were partially restored after three days.

Seoul accused Pyongyang of staging cyber-attacks on websites of major South Korean government agencies and financial institutions in March this year and in July 2009.

The 2009 attack also temporarily shut websites in the United States, but US officials did not reach a conclusion on who was responsible.

Experts say the North maintains elite hacker units prompting the South to set up a specific military command to combat them. Intelligence officials believe some North Korean hackers are based in China.