compensating balance

noun

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.possession

   Examples

   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

   Source: WordNet 3.0