Understanding Your Accounts-. In some banks and for some account holders, the stipulated limit does not mean that the customer cannot exceed the limit but the amount by which the limit is exceeded (called excess/default) would attract a higher debit interest rate. For overdraft facility, the bank will apply dual rates for the overdraft charges.
COT calculation is one of the major means through which banks overcharge customers especially the high net worth and volume accounts. There are about six classes of transactions exempted from COT charges but most of the banks do not apply these exemptions