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Applications Supported by Blocked Amounts
Detailed procedure of applying in IPO (Initial Public Offering) through ASBA.
Under ASBA facility, investors can apply in any public/ rights issues by using their bank account. Investor submits the ASBA form (available at the designated branches of the banks acting as SCSB) after filling the details like name of the applicant, PAN number, demat account number, bid quantity, bid price and other relevant details, to their banking branch by giving an instruction to block the amount in their account. In turn, the bank will upload the details of the application in the bidding platform. Investors shall ensure that the details filled in the ASBA form are correct otherwise the form is liable to be rejected.
Following advantages applying through ASBA facility :
The investor need not pay the application money by cheque rather the investor submits ASBA which accompanies an authorization to block the bank account to the extent of the application money.
The investor does not have to bother about refunds, as in ASBA only that much money to the extent required for allotment of securities, is taken from the bank account only when his application is selected for allotment after the basis of allotment is finalized.
The investor continues to earn interest on the application money as the same remains in the bank account, which is not the case in other modes of payment. The application form is simpler.
The investor deals with the known intermediary i.e. its own bank.
Only the amount to the extent of application money authorized in the ASBA is blocked not a bank account will be blocked The balance money, if any, in the account can still be used for other purposes.
Any investor who satisfies the below conditions is eligible and can apply for shares under ASBA mode: All Categories Holds a savings and current account with the Bank.Has a valid PAN