| NOUN | possession | 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 |
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| Meaning | 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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| Example | "the compensating balance increases the effective interest rate to the bank since the net amount loaned is reduced but the interest paid is unchanged" | |
| Synonym | offsetting balance | |
| Broader | balance | The difference between the totals / totals of the credit and debit sides of an account |
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