✅ Correct Answer: B The correct combination is Statement 2 and 3. The all-in-cost ceiling previously represented the maximum permissible cost of raising an offshore loan, encompassing the interest rate, guarantee fees, and other expenses, excluding commitment fees and withholding tax.The 2026 regulatory overhaul introduced a fundamental shift by completely removing this explicit ceiling.Structurally, borrowers and lenders are now permitted to negotiate pricing, prepayment charges, and penal interest based strictly on prevailing market conditions, subject to the oversight of the designated Authorised Dealer Category 1 bank.Historically, the framework enforced a strict cap of the applicable benchmark rate plus 500 basis points for foreign currency debt, and the benchmark rate plus 450 basis points for Rupee-denominated debt.This static cap often rendered offshore borrowing untenable for companies with diverse risk profiles during periods of high global interest rates.The causal reasoning for removing the cap in February 2026 was to improve pricing efficiency, grant flexibility to borrowers and offshore credit funds, and transition to a risk-based pricing model that reflects the actual credit strength of the borrower and current international market dynamics.