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Transformers are important and expensive elements of a power system. Inordinate localized temperature rise, hottest spot temperature (HST), causes rapid thermal degradation of insulation and subsequent thermal breakdown. To prescribe the limits of short-term and long-term loading capability of a transformer, it is necessary to estimate the HST of transformer winding to as high a degree of accuracy as can possibly be made. These papers have now improved the accuracy of estimation of hottest spot temperature. Inordinate temperature rise in a power transformer due to load current is known to be the most important factor in causing rapid degradation of its insulation and decides the optimum load catering ability or the load ability of a transformer. The top oil temperature (TOT) and hottest spot temperature (HST) being natural outcome of this process, an accurate estimation of these parameters is of particular importance. IEEE / IEC among others have proposed procedure to estimate the temperatures, however, the accuracy of the predictions are not always as good as are desired. Unacceptable temperature rise may occur due to several fault conditions other than overloading, and hence warrant an online monitoring of the transformer.