Compensating balance - An excess balance that is left in a bank to provide indirect compensation for loans extended or services provided.
The balance required to be kept on deposit at a bank by a borrower when taking out a loan. Should the borrower fail to repay the loan either in full or in part, this balance would be forfeited. Compensating balances are typically 10% of the loan amount.
Compensating balance : an excess balance that is left in a bank to provide indirect compensation for loans extended or services provided.
the balance required to be kept on deposit at a bank by a borrower when taking out a loan. should the borrower fail to repay the loan either in full or in part, this balance would be forfeited. compensating balances are typically 10% of the loan amount.
Compensating balance