A minimum cash balance required by a bank is called

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A compensating balance is a minimum balance that a bank requires a borrower to keep as a condition of granting a loan. This balance is held in the borrower's account and cannot be used until the loan is repaid. It helps the bank reduce risk and ensure that the borrower has funds available to make payments on the loan. Cash in bank and cash equivalents refer to actual cash held by the bank and can be used for any purpose. EFT (Electronic Funds Transfer) is a method of transferring money electronically between accounts.

A Minimum Cash Balance Required by a Bank Is Called