Drawing power (dp) vs sanctioned limit

Hi Abhinandan, without going into details of RBI regulations, I understand that drawing power refers to amount that a borrower can withdraw each month/ period based on the latest reported inventories/ book debts, whereas sanctioned limit is the amount of loan/ total credit limit sanctioned by the bank at the time of commencement of the credit facilities. Normally drawing power has to be within the limit of amount sanctioned initially. but based on fund requirements of the borrowers and their credit standing, bank may allow them to withdraw in excess of the sanctioned amount if the drawing power allows them to do so. Normally this excess withdrawal is known as temporary overdraft (TOD) which carries slightly higher rate of interest.