Applications Supported by Blocked Amount (ASBA) is a process developed by the India's Stock Market Regulator SEBI for applying to IPO. In ASBA, an IPO applicant's account doesn't get debited until shares are allotted to them.
ASBA FACILITY IS NOW LIVE IN AU BANK ,AT THIS TIME ONLY PHYSICAL APPLICATIONS WILL BE ACCEPTED BY AU BANK
The full form of ASBA is ‘Application Supported by Blocked Amount’. The application gives an authorization to bank for blocking the application amount in your bank account, for subscribing to an Initial public offering (IPO) of Shares /NFO of Mutual Funds/Follow on Public Offer (FPO). The authorization for blocking application money is done by the Bank where client has his Account . If you are applying through ASBA, your application money will debited from the bank account only if your application is selected for allotment after the basis of allotment is finalized.
Certification For ASBA Services
AU SMALL FINANCE BANK LTD is recognized by SEBI as a bank which is capable to provide ASBA services to customers. SEBI website enlists the names of such banks and their branches and updates it regularly.
SEBI Definition of ASBA
As per definition in clause (d) of sub-Regulation (1) of Regulation 2 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009, ASBA is –
“An application containing an authorization to block the application money in the Bank account for subscribing to an IPO/FPO or Rights Issue.”
Who can use ASBA facility
A retail investor is eligible to apply through ASBA process if he/she :
A residential retail investor
Has a Demat A/C with any of the Depository participant like NSDL or CDSL along with valid PAN
Has clear balance in his/her savings or current account
Is bidding at cut off
An Investor who applies through ASBA is known as ‘ASBA Investors’
“ASBA investors” must provide accurate information in the application regarding
PAN card number
DP ID (depository participant identification) number
Client identification number or the Clients ID from your broker’s account
Bank account number
Benefits of ASBA Facility
The amount remains blocked in your bank account for the IPO application.
There is no loss of interest. The account continues to earn interest on the funds blocked. The blocked fund is debited post allotment and then the interest stops on the debited part.
There is no need to wait for your refund cheques/ECS credits.
Bank will unblock the application money from the frozen accounts in case the application is rejected or there is no allotment or the issue is withdrawn. For this, the Bank will receive instructions from the registrar of the issue.
The blocked amount is considered while calculating average quarterly balance (AQB) in the account.
The application form is simple and easy to fill
The applicant need not have to submit any physical documentation to avail of this facility.
This facility is absolutely free.
Process for ASBA
You have two options to apply for an IPO through ASBA if you are an Indian resident. The two options are online mode and offline mode.
Under offline mode, you have to fill correctly the ASBA forms for the IPO. The ASBA form is available from BSE website, NSE website or from your branch. You need to fill correct information on your name, bank account number, your DP number and etc. The application gets rejected if there is any mismatch of information with your bank account or PAN information or even if the form remains incomplete. So give full attention while filling your application. After that, you need to submit your correctly filled application with your AU Bank branch. The bank will further process your application .
ONLINE MODE IS NOT AVAILABLE RIGHT NOW THROUGH AU SMALL FINANCE BANK LTD
Blocking of Account
Client entire bank balance is not blocked, But only an amount equivalent to his/her application money is blocked in bank account. Balance amount can be used by client .
In 2016, after the demise of her husband and two sons, Hema took charge of her husband’s Motor Driving School. AU Bank transferred the car loans in her name and provided support when Hema needed it the most. After one year, Hema became independent and her business is running better then before. She is also providing employment to four drivers in her Motor Driving School.
Owner - Motor Driving School
Vikas Soni, a teenager from Navalagarh — a small town in Rajasthan, has seen the hardships his father underwent to raise a family. The agricultural income was never enough to feed the family of 12 members.
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Since then there was no looking back for this progressive man. Today, Vikas owns 3 pick-up vans, runs an event management business, where he supplies flowers and makes music arrangements (DJ) at weddings, hotels and other events in and around his village.
Today, he is financially independent and is doing well.
Owner of Pick-up vans
AU Bank was very quick. The customer service was very cheerful and helpful there. They sort everything very nicely.
Manohar Singh Rajawat
Raju Bhai a progressive farmer who hails from a village near Ahmedabad had understood that dependence on agriculture alone for livelihood will never be enough to fend for his family. AU Bank extended support and gave wings to his aspirations by catering to his financial requirements.
Raju Bhai is earning handsome surplus, besides the income from his agriculture income. He has a well-settled pick-up vehicle business with three vehicles and two drivers who are paid 8000 each.