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Definitions and Synonyms of compensating balance | Another word for compensating balance | What is compensating balance?

Definition 1: 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 - [noun denoting possession]

Samples where compensating balance or its synonyms are used according to this definition

  • 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 for compensating balance in the sense of this definition

(compensating balance is a kind of ...) the difference between the totals of the credit and debit sides of an account

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