compensating balance

This is not a dictionary! - Search for "compensating balance" in The Danish Dictionary

• February 27. 2016 from wordnet.princeton.edu

  compensating balance — noun — english

  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"