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Related to compensating balance: interest
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|Noun||1.||compensating 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"|
balance - the difference between the totals of the credit and debit sides of an account