Money deposited by a borrower with the bank in a low or non-interest-bearing account as part of a loan agreement is called a compensating balance.

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A compensating balance is indeed money that a borrower is required to keep in a low or non-interest-bearing account with a bank as part of the terms of a loan agreement, often to compensate the bank for the loan or to improve the loan terms.

Money Deposited by a Borrower with the Bank in a Low