What is ASBA ?

by khalid on 25/11/2010 · 2 comments

ASBA means Applications Supported by Blocked Amount. SEBI always comes out with rules to protect the rights of retail investors. This time they brought ASBA, this rule is for investors who apply for IPOs. SEBI introduced a supplementary process of applying in public issues (IPOs) called Applications Supported by Blocked Amount (ASBA). ASBA is a new investor friendly way to apply for IPOs.
This process is available in all public issues made through the book building route.

The main features of ASBA process are as follows:-

1. ASBA is an application for subscribing to an issue, containing an authorisation to block the application money in a bank account.
2.Self Certified Syndicate Bank (SCSB) is a bank which offers the facility of applying through the ASBA process.

The objective of introducing ASBA is to ensure that the investor’s funds leave his bank account only upon allocation of shares in public issues. The ASBA process also ensures that only the requisite amount of funds are debited to the investor’s bank account on allotment of shares. In this mechanism, the need for refunds is completely obviated.

The list of SCSBs are as below :-

* Allahabad Bank
* Andhra Bank
* Axis Bank
* Bank of Maharashtra
* Bank of Baroda
* Bank of India
* Canara Bank
* Central Bank of India
* Citi Bank
* Corporation Bank
* Deutsche Bank
* Federal Bank
* HDFC Bank
* HSBC Bank
* ICICI Bank Ltd
* IDBI Bank Limited
* Indian Bank
* Indusind Bank
* J P Morgan Chase Bank, N.A.
* Karur Vysya Bank
* Kotak Mahindra Bank
* Nutan Nagrik Sahakari Bank Ltd.
* Oriental Bank of Commerce
* Punjab National Bank
* South Indian Bank
* Standard Chartered Bank
* State Bank of Travancore
* State Bank of Bikaner & Jaipur
* State Bank of India
* State Bank of Hyderabad
* Syndicate Bank
* UCO Bank
* Union Bank of India
* United Bank of India
* Vijaya Bank
* Yes Bank Limited

Using this interface the banks, participating in the IPO process would be able to upload the bids with respect to their customers, into the electronic book of BSE. The interface facilitates not only the controlling branch but also the designated branches of the banks to directly upload the bids into the electronic book at BSE. The ASBA application has been successfully tested with eleven banks.

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{ 2 comments… read them below or add one }

SURESH November 29, 2010

Although it is good,it is not available with ‘Internet banking/Self-service banking’ in most of the Banks.Do you know what all banks offer this service via ‘Internet banking/Self-service banking’?
Since,it is unavaliable in Internet banking,we need to visit the bank to file the application.More-over ,only few of the the branches of the ‘Syndicate’ are willing to ‘take the application’,as they have specific branches to avail this service.Hence the the true benefit/usage of this ASBA is minimal
Any thoughts,please share with me?



khalid November 29, 2010

Hi Suresh,
Agreed with you that most of the banks are not encouraging to use this interface. Though some of the banks are giving this option to use online. ICICI Direct is providing this to its member for long time but it will take some time for stock exchanges, banks, registrar and investors to accept this process and start using it. So the true benefit of ASBA will be effective only the time when regulators make it mandatory.
What do you say ?


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