Chawrasia, who signed for a bogey-free 68, actually birdied the par-4 ninth hole, but signed for a four.
Yet he was seven-under 135 and shared third place with Rashid, home hero Prayad Marksaeng and Filipino Angelo Que, all of whom shot 70 each, Juvic Pagunsan (69) and Thai Pasavee Lertivilai (66).
Thailand's veteran star Thaworn Wiratchant hit a glorious back nine 28 en route to an eight-under-par 63 to snatch the halfway lead. The 50-year-old Thaworn, was one shot ahead of Nicholas Fung of Malaysia who shot 68-68.
A top-two finish in the USD 500,000 tournament here can push Chawrasia, a six-time Asian Tour winner, into top spot on the Merit list, which he has said is one of his goals for the year.
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Chawrasia said, "I'm playing good, it's good going. I'm happy. The last two weeks, I've played well in England and Sweden except for the last round. I'm here and I'm in joint lead. So I'm looking forward to the next two days. If I win it, I can be number one on the Order of Merit. If I can finish as number one, it'll be my biggest achievement."
Asked about his signing for a four, when he actually birdied the par-4 ninth, he said, "It's my own fault. I didn't check my scorecard. This is the second time it's happened in my career."
Meanwhile, Rashid Khan, who has gone back to his 'baseball' grip, landed an eagle on 12 with a hole-out from 138 yards with a nine iron. It kept him in the hunt for a third Asian Tour victory despite a cold putter, which he meant he 30 putts.
"But I still didn't convert anything coming in and bogeyed 17. Some misreads and hit some putts on the wrong line. Other than that, it was decent," he added.