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English noun: compensating balance

1. compensating balance (possession) a minimum credit balance that a bank may require a borrower to keep on deposit as a condition for granting a loan; a common requirement for establishing a line of credit at a bank


SamplesThe compensating balance increases the effective interest rate to the bank since the net amount loaned is reduced but the interest paid is unchanged.


Synonymsoffsetting balance


Broader (hypernym)balance









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