compensating balance

Noun compensating balance has 1 sense

• compensating balance(n = noun.possession) 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"
is a kind of balance