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What is ASBA? All you Need to Know About ASBA can be learned from the blog shared below. The security exchange Board of India has made it mandatory for the investors to fill out the application form of ASBA so that their amount is blocked in their bank account and they do not lose any funds that they might lose due to the uncertainty of stock exchange. You can check out the specifications related to the transaction details for this application from the article provided below so that you have proper information related to investments before getting your first investment.
What is ASBA?
ASBA is also known as an application supported by a block amount and it is an IPO application procedure which is developed by the stock exchange bureau of India. It is an application which can block the application money in a particular bank account to subscribe to an IPO issue. You will not be able to use the blocked amount for any purpose however you will be earning the interest on the particular amount. If you are a non-retail investor and you want to invest in an IPO then it is mandatory that you apply through ASBA. Whenever you are applying through ASBA your money will be debited from your bank account only if your application is selected for the allotment and the money will be refunded to your bank account if you do not get the IPO issue or the issue has been withdrawn by the concern authorities. SEBI has also directed that it is mandatory to fill out the ASBA application form if you want to invest in an IPO.
Details About ASBA
There are a lot of unique benefits for the investors who are applying for an IPO through ASBA because the money is actually blocked in your bank account and you will not lose out on interest income. The investors will be able to continue to earn interest on the blocked amount. The ASBA will eliminate the need to pay money through checks and demand drafts. This facility is really easy to use and it does not involve any extra cost. The investors can easily apply through net banking without submitting any physical documentation. The investors will not have to worry about the refunds and when there are no shares allotted your money will be written back to you.
Eligibility Criteria of ASBA
There is a proper eligibility criterion that the investors will have to follow if they are filling out the application form presented by the authorities of SEBI for ASBA. Not all of the investors will be able to fill out the application form presented by the concerned authorities so a particular eligibility criterion has been presented by the organisation in order to help the investors take into account the application. You can check out the eligibility criteria for the application form from the pointers provided below.
- The applicant must be an Indian residential investor.
- The applicant must have a valid PAN number along with the Demat account and trading account.
- The applicant must apply through the blocking of funds in the bank account with self-certified Syndicate banks.
- You should have an adequate balance in your bank account.
- You should bid at the cut-off, with a single option of a number of shares to bid for.
- You should not bid under any of the reserved categories.
- You have agreed to the terms and conditions of not revising a bid.
Application Process For ASBA
You can apply for ASBA through both online and offline methods as presented by the organisation and if you are following the online method then you will first have to login into the net banking account and then click on the option called IPO application. Then you will have to select a particular IPO and fill out the details related to a Demat account. You need to confirm your orders and the amount you are getting will be blocked in your bank account up to the finalisation of the allotment. You can also download the application form from the Bombay Stock exchange official website or the National Stock exchange official website.
If you want to start your journey as an investor then you have to take into account the details related to ASBA so that you can check out the specifications related to the details that you need in order to start your investment. Entri is a learning platform which was created by well-known experts in the industry in order to help the candidates get proper knowledge related to the competitive examinations. Enrol now and you will be eligible to get information related to the mock test series available on our platform created by experts in the industry.