compensating balance English

Meaning compensating balance meaning

What does compensating balance mean?

compensating balance

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

Synonyms compensating balance synonyms

What other words have the same or similar meaning as compensating balance?

compensating balance English » English

offsetting balance