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Meaning of word compensating balance from English dictionary with examples, synonyms and antonyms.
compensating balance noun
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.
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.
Synonyms : offsetting balance
Compensating balance meaning in Bengali (Bangla).