Which one of the following four options does NOT represent a benefit of compensating balances to the bank?

Which one of the following four options does NOT represent a benefit of compensating balances to the bank?
A . Compensating balances allow the bank to net some of the exposure they may have in case of default, by taking funds from these specific deposit account one the borrower defaults.
B . Since the compensating balances cannot be withdrawn at short notice, if at all, they are not considered transaction accounts and are able to provide a stable funding to the bank, reducing its reliance on more volatile external inter-bank based funding sources.
C . Compensation balances influence the expected loss rate of the bank given the default obligor and improve capital structure by controlling obligor type and avoiding payment delays.
D . Since the compensating balances reduce the next amount lent to the borrower, the earned return on the loan is increased, further widening the bank’s interest rate margin and profitability.

Answer: C