Tuesday, 9 November 2010

ASBA – Application Supported by Blocked Amount

Securities and Exchange Board of India (SEBI) has recently introduced a new process for Applying Initial Public Offering (IPO) or Follow on Public Offering (FPO) or right issue of a Company, named ASBA  (Application Supported by Blocked amount) process.  Under ASBA process, the bid amount is blocked in your account at the time of bidding.  If and when an allotment is made against your application to the extent of money due on the shares allotted, your account will be debited and the money will be remitted to the company.  Therefore, the bid amount remains in your account earning interest during the whole process period.  Your account will be debited only to the extent of shares allotted, if any, and the remaining amount will be unblocked.

There will be no refund as such and therefore the problems related to non-receipt of refund will not be encountered by you.  This is a facility extended by some self certified syndicate bankers (SCSBs) who have registered as such with SEBI.  Currently some banks have been identified as SCSB banks.(Please see the list below)

SEBI may register more SCSB (Self Certified Syndicate Bank) banks as and when they undergo the self certification process.   In case your bank is not one of the SCSB as on date/you are not dealing with any of the bank listed above, you are requested to verify with them as to whether they have got subsequently registered as SCSB.

This is a good movement that the applicant should not pay any amount until he or she get the allotment and there is no chance of excess payment in any case and no refund is required. Only thing is that we have to keep the required amount of our bid or application in our bank account and they will freeze the required amount till allotment process is over. We wont loss any interest and we should not wait for refund.

Recent Posts

Following banks have been identified as SCSB banks

SLName of the bankSLName of the bank
1.Axis Bank Ltd19.Kotak Mahindra Bank Ltd.
2. State Bank of Hyderabad20.Bank of India
3.Corporation Bank21.CITI Bank
4.State Bank of Travancore22.IndusInd Bank
5.IDBI Bank Ltd.23.Allahabad Bank
6.State Bank of Bikaner and Jaipur24.Karur Vysya Bank Ltd.
7.YES Bank Ltd.25.The Federal Bank
8.Punjab National Bank26.Indian Bank
9.Deutsche Bank27.Central Bank of India
10.Union Bank of India28.Oriental Bank of Commerce
11.HDFC Bank Ltd.29.Standard Chartered Bank
12.Bank of Baroda30.J P Morgan Chase Bank, N.A.
13.ICICI Bank Ltd31.Nutan Nagarik Sahakari Bank Ltd.
14.Vijaya Bank32.UCO Bank
15.Bank of Maharashtra33.Canara Bank
16.State Bank of India34.United Bank of India
17.Andhra Bank35.Syndicate Bank
18.HSBC Ltd.36.South Indian Bank


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