BankNifty Trading Slab on spot 1.25 %


3 days back (22 Jun) Bank Nifty was trading around 23500. I placed a CE option order with strike price 23900 (expiry 22 Jun) but it was getting rejected continuously with an error RMS:Rule: Check holdings for entity account across exchange across segment across product where as it was placed successfully when market started. I called Zerodha support and had a word with an zerodha exec and he said we get a slab of 1.25% of the spot price. At that time spot price was around 23.5k so as per the point

23500+ 1.25%= 294 = 23,794 or 23500-1.25% = 294= 23 206. Zerodha exec said that in this case i can trade in 23 700 CE or 23300 PE and i cross the slab 294 abve the spot or below.

My Question is what if i am already holding a CE of 23900 and in case on the day of expiry its trading at 24500 spot will I be able to square off my Position. ?? What happens in case if i am unable to square off due to slab of 1.25% and my In The Money option expires.? I have read Zerodha blog that ITM option if not squared off leads to huge problem. Pls clarify this.