Applications Supported by Blocked Amount (ASBA) is an additional Payment Mode introduced by
India's capital market regulator SEBI, with a view to make the existing
public issue process more efficient. The ultimate aim is to reduce the time
period between the Issue closure date and listing of shares. It also
eliminates delay in receipt of refund of oversubscription amounts.
ASBA means an application for subscribing to a
public or rights issue, along with an
authorization to the Bank to block the
application money in a Bank account.
Process of ASBA
- An ASBA investor, who maintains a Savings or a Current account with
any branch of the Bank, can submit a physical ASBA to the designated branches
or electronically through internet banking facility, during the issue open
period which is defined issue to issue.
- The Demat account of the applicant can be with any of the
Depository Participant.
- In an ASBA, a maximum of three bids are permitted within the
price band and in multiples of lot size specified by the issuer. The amount
equivalent to the highest bid will be blocked.
- The Bank in turn, will block the application money in the Saving
Bank or Current account specified in the ASBA application, on the basis of an
authorization to this effect given by the account holder in the ASBA
application form.
- Adequate clear balance should be available in the account that
is proposed to be blocked.
- The bids can be revised (upward or downwards), withdrawn or
cancelled during the issue open period.
- The application money will remain blocked in the bank account
till finalization of the basis of allotment of the issue or till withdrawal
of / failure of the issue or till withdrawal / rejection of the application,
as the case may be.
- The Bank shall, within the issue open period, upload the
application data in the electronic bidding system of the Stock Exchanges.
- In case of withdrawal / failure of the issue, the Bank on
receipt of information from the Registrar to the Issue shall unblock the
amount.
- Once the basis of allotment is finalized, the Registrar to the
issue shall send an appropriate request to the Controlling Branch for
unblocking the relevant bank account and for transferring the requisite
amount to the issuers account designated for this purpose.
- The allotted shares will be credited to the Demat account of the
applicant specified in ASBA
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