Things to Know about ASBA
Under ASBA, short for ‘application supported by blocked amount’, investors can apply in public/rights issues by using their bank account. It provides an alternative mode of payment in issues whereby the application money remains in the investor’s account till finalization of basis of allotment in the issue. Basically, it contains an authorization to block the application money in the bank account. So, if an investor is applying through ASBA, their application money shall be debited from the bank account only if their application is selected for allotment after the basis of allotment is finalized, or the issue is withdrawn/has failed. Read on to find out if you are eligible to apply through ASBA, and whether you should apply through ASBA in the first place.
An investor submits the ASBA form (available at the designated branches of banks acting as self-certified syndicate banks [SCSBs]) after filling in the required details like name of applicant, PAN number, demat account number, bid quantity, and bid price, along with 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 will ensure that the details that are filled in the ASBA form are correct; otherwise the form is liable to be rejected.