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Definition of 'compensating balance'

Princeton's WordNet

1. (noun) compensating balance, offsetting balance
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"

'compensating balance' - Nearby Entries
compensable compensate compensated compensating balance compensation compensative compensatory damages

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"compensating balance." Definitions.net. STANDS4 LLC, 2012. 15 February. 2012. http://www.definitions.net/definition/compensating balance

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