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    Question

    As per the terms specified, the interest rate applicable

    to an Overdraft (OD) beyond WMA will be:
    A Repo Rate Correct Answer Incorrect Answer
    B Repo Rate minus 1% Correct Answer Incorrect Answer
    C Repo Rate plus 1% Correct Answer Incorrect Answer
    D Repo Rate plus 2% Correct Answer Incorrect Answer
    E Bank Rate Correct Answer Incorrect Answer

    Solution

    The pricing terms are differentiated: WMA carries the Repo Rate, while OD is priced at two percentage points above the Repo Rate. Hence, when the account moves into overdraft beyond sanctioned WMA, the rate step-up to Repo + 2% applies.

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