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
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compensating balance::noun | Spocien Dictionary
| Type | Words |
|---|---|
| Synonyms | offsetting balance |
| Type of | balance |
the compensating balance increases the effective interest rate to the bank since the net amount loaned is reduced but the interest paid is unchanged.
Examples of compensating balance
compensating balance
You're maintaining the $7,500 compensating balance.
From the suntimes.com
There has to be some sort of compensating balance.
From the economist.com
Many now worry that the wrong balance has been struck between compensating those who have suffered and sparing businesses that had little to do with the problem.
From the economist.com
They provided a steelyard balance that allowed seasonal adjustment in the pressure head of the compensating tank and could then control the rate of flow for different lengths of day and night.
From the en.wikipedia.org
