ASBA abbreviated as Application Supported by Blocked Amount is an IPO application process developed by SEBI. It is an application containing an authorization to block the application money in the bank account, for subscribing to an IPO issue. You cannot use the blocked amount for any purpose. However, you can continue to earn interest in the blocked amount. If you are a non-retail investor wanting to invest in IPO, it is mandatory to apply through ASBA.
As an investor, if you apply through ASBA, your money gets debited from your bank account only if your application is selected for allotment. It is refunded to your bank account if you do not get the IPO issue or the issue has been withdrawn. From 2016 onwards, the SEBI has directed that it is mandatory to fill an ASBA form if you wish to invest in IPO.
Here are some of the eligibility criteria for ASBA:
You can apply for ASBA through both online and offline methods. Here are some of the steps to apply for ASBA:
1. Online ASBA Application
2. Offline ASBA Application
Here are some of the unique benefits for investors applying through ASBA process:
No, the chances of getting allotment are the same for all the applicants whether the application is made through ASBA or non-ASBA.
Yes, the ASBA application can be rejected under the following circumstances:
1. If you do not have sufficient balance in your bank account.
2. If there is a mismatch in your name on the PAN Card with that in your application form or Demat account holder name.
3. If there are multiple applications by the same investor.
4. If the information mentioned by you is incorrect.
No, the entire bank account is not blocked. Only the stipulated amount worth the stocks is blocked. Rest of the balance can be utilized for other purposes.
Yes, you can make an application through ASBA process in all the issues.
An SCSB is a recognized bank capable of providing Application Supported by Blocked Amount Service (ASBA) to its clients.