Application Supported by Blocked Amount (ASBA) for IPO's & Rights Issues
What is ASBA:
ASBA [Applications Supported by Blocked Amount] is a system of blocking the funds of applicants of IPOs in their respective accounts and release the funds to the Company from such blocked accounts only after the allotment to the extent of allotment made and unblock the remaining amount in the account
Who can Apply :
All Resident Individuals, HUF and QIBs having Demat a/c, PAN No. and maintaining Current /SB/CLSB with any Corp Bank branches.
Features of ASBA:
1. ASBA IPO Applications will be received at the Designated Branches
2. On receipt of ASBA applications, the Branches will mark lien in the specific account of the customer to the extent of amount applied for through the system.
3. This amount gets blocked in the account and money will however continue to remain in the account of the customer till the date of allotment.
4. The details of the IPO application and the amount blocked would be passed to the Exchange and Registrar through the system.
5. The amount held in the account of the customer would continue to earn interest as applicable to the account.
6. Any withdrawals or debits to the extent of blocked amount are not permitted in the account till the finalisation of allotment of shares. However, balance in the account over and above the blocked amount is free from any charge.
7. When the Registrar completes the process of allotment, based on the instructions released from the Registrars, the system will debit the account to extent of the allotment and will unblock the account.
8. The applicants can cancel, revise or modify the bid within the bidding period.
Advantages of ASBA:
1. No issue of Cheque / Purchase of DDs and hence no clearing.
2. Applicant can make 5 applications from a single deposit account.
3. Money lies in the a/c and earns interest.
4. Lien marked only to the extent of the bid amount.
5. Money to be appropriated on allotment to the extent of shares allotted.
6. No physical refund involved, no hassles of lost / delayed refunds.
7. Shorter turnaround time for entire IPO processing.
- From 01.01.2016, SEBI has made compulsory that Investors applying in a Public Issue shall use only ASBA.
- ASBA can be submitted to the SCSB with which the investor is holding the bank account.
- Five (5) applications can be made from a bank account per issue.
- The entire bank account will not be blocked. Only the amount to the extent of application money authorized in the ASBA will be blocked in the bank account. The balance money, if any, in the account can still be used for other purposes.
- Investor can either fill up the physical ASBA form available with SCSB and submit the same to the SCSB or apply electronically/online through the internet banking facility/UPI (if provided by your SCSB).
- Investors need not necessarily have their DP account with the SCSB, where they are submitting the ASBA form.
Investor can withdraw ASBA Bids:
- During the bidding period one can approach the same bank to which he/she had submitted the ASBA and request for withdrawal through a duly signed letter citing your application number, TRS number, if any. After the bid closure period, he/she may send withdrawal request to the Registrars before the finalization of basis of allotment, who will cancel the bid and instruct SCSB to unblock the application money in the bank account after the finalization of basis of allotment.
- If the withdrawal is made during the bidding period, the SCSB deletes the bid and unblocks the application money in the bank account. If the withdrawal is made after the bid closure date, the SCSB will unblock the application money only after getting appropriate instruction from the Registrar, which is after the finalization of basis of allotment in the issue.
ASBA is available at designated branches of the Bank.