To prevent commercial banks from relying excessively on central bank overdraft lines, regulators implement strict behavioral limits and automated enforcement tools.
Managing Intraday Credit Lines
[Overdraft Request Filed] ---> Check Institutional Credit Cap ---> Apply Fee Tier Structure
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[Process Credit Allocation]
- Charges fees on uncollateralized overdrafts above cap limits
- Encourages banks to use private interbank funding lines first

Central banks establish clear Credit Caps for each bank based on its capital adequacy score. If an institution draws credit past its approved limit or fails to repay an overdraft by the system’s closing time, it faces automated penalty fees and overnight lending charges, encouraging banks to manage their liquidity buffers prudently.
 
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