FAQs on ASBA for Investors
1. What is “ASBA”?
ASBA means “Application Supported by Blocked Amount”. ASBA is an application containing an authorization to block the application money in the bank account, for subscribing to an issue. If an investor is applying through ASBA, his application money shall be debited from the bank only if his/her application is selected for allotment after the basis of allotment is finalized, or the issue is withdrawn/failed.
2. Who can apply through ASBA facility?
SEBI has been specifying the investors who can apply through ASBA. In public issues w.e.f January 1, 2010 all the investors other than Qualified Institutional Buyers (QIBs) can apply through ASBA.
In rights issues, all shareholders of the company as on record date are permitted to use ASBA for making applications provided he / she / it:
is holding shares in dematerialized form and has applied for entitlements or additional shares in the issue in dematerialized form;
has not renounced its entitlements in full or in part;
is not a renouncee;
who is applying through blocking of funds in a bank account with the Self Certified Syndicate Bank
3. What advantage an investor has in applying through ASBA vis-à-vis applying through an application with a cheque?
Applying through ASBA facility has the following advantages:
The investor need not pay the application money by cheque; rather the investor submits ASBA which accompanies an authorization to block the bank account to the extent of the application money.
The investor does not have to bother about refunds, as in ASBA only that much money to the extent required for allotment of securities, is taken from the bank account only when his application is selected for allotment after the basis of allotment is finalized.
The investor continues to earn interest on the application money as the same remains in the bank account, which is not the case in other modes of payment.
The application form is simpler.
The investor deals with the known intermediary i.e. its own bank.
4. Is it mandatory for investors eligible for ASBA, to apply through ASBA only?
No, it is not mandatory. An investor, who is eligible for ASBA, has the option of making application through ASBA or through the existing facility of applying with cheque.
5. Can I make application through ASBA facility in all issues?
Yes. You can make application through ASBA facility in all issues i.e. public and rights.
6. Where should I submit my Application Supported by Blocked Amount (ASBA)? How shall I know which bank and which branch of that bank is the designated branch for accepting ASBA application?
List of Self Certified Syndicate Banks (SCSBs) and their designated branches i.e. branches where ASA application form can be submitted, is available on the websites of BSE (www.bseindia.com) and NSE (www.nseindia.com)and on the website of SEBI. The list of SCSB would also be given in the ASBA application form.
7. What is Self Certified Syndicate Bank (SCSB)?
SCSB is a bank which is recognized as a bank capable of providing ASBA services to its customers. Names of such banks would appear in the list available on the website of SEBI. [Also see the answer to question (6)].
8. Can I submit ASBA in any of the banks specified in the list of SCSBs?
No, ASBA can be submitted to the SCSB with which the investor is holding the bank account.
9. How many applications can be made from a bank account?
Five (5) applications can be made from a bank account per issue.
10. Am I required to submit ASBA only physically?
No, you can either fill up the physical ASBA form available with SCSB and submit the same to the SCSB or apply electronically through the internet banking facility (if provided by your SCSB).
11. Can I use the existing application form for public issues for applying through ASBA?
The investor is requested to check the form carefully. In the case of public issue, the application form for ASBA will be different from the existing application form for public issues. The application forms will be available with designated branches of SCSB. In the case of the rights issue, there will not be a separate form of ASBA. The investor has to apply by selecting the ASBA option in Part A of the Composite Application Form.
12. Can I withdraw my ASBA bids? If yes, how?
Yes, you can withdraw ASBA bids. During the bidding period, you can approach the same bank to which you had submitted the ASBA and request for withdrawal through a duly signed letter citing your application number, TRS number if any.
13. Who should I approach if I find that I had given all correct details in the ASBA form but an application has been rejected stating wrong data?
You have to approach the concerned SCSB for any complaints regarding your ASBA applications. SCSB is required to give a reply within 15 days. In case, you are not satisfied, you may write to SEBI thereafter at the following address:Investor Grievance Cell, Office of Investor Assistance & Education Securities & Exchange Board of India
Post No: C4-A,'G' Block, Bandra Kurla Complex
14. Whether my bank account will be blocked or only the amount to the extent of application money is blocked?
No. the entire bank account will not be blocked. Only the amount to the extent of application money authorized in the ASBA will be blocked in the bank account. The balance money, if any, in the account can still be used for other purposes.’
15. If I withdraw my bid made through ASBA, will the bank account be unblocked immediately?
If the withdrawal is made during the bidding period, the SCSB deletes the bid and unblocks the application money in the bank account. If the withdrawal is made after the bid closure date, the SCSB will unblock the application money only after getting appropriate instruction from the registrar, which is after the finalization of basis allotment in the issue.
16. Do I necessarily need to have a DP account with the SCSB where I intend to submit the ASBA application?
No. investors need not necessarily have their DP account with the SCSB where they are submitting the ASBA form.
17. Can I submit my ASBA to a broker as is being done in the present issue process applying through cheque?
You are required to submit ASBA to the SCSBs only.
18. Can I apply in an issue through “ASBA” facility and through “normal existing system of payment through cheque”?
No. An investor can apply either through ASBA or through the existing system of payment through cheque. If an applicant applies through ASBA as well as non ASBA then both the applications having the same PAN will be treated as multiple applications and hence rejected.
19. Are the bids submitted through ASBA and uploaded in the electronic bidding system of the stock exchange, in case of the public issue through book building; reflect in the demand graphs displayed in the website of the stock exchanges?
Yes. The bids received through ASBA mode will also be reflected in the demand graphs displayed on the website of the stock exchange.
20. Who is responsible for errors in the data uploaded in the electronic bidding system in case of a public issue?
In case there is an error in the data furnished in the application form submitted by the investor, the investor shall be responsible. In case there is an error by SCSB in entering the data in the electronic bidding system of the stock exchanges, the SCSB shall be responsible.
21. Will I get the acknowledgement of receipt for applications submitted through ASBA from the SCSB?
Yes. The SCSB shall give a counterfoil as an acknowledgement at the time of submission of ASBA and also the order number, generated at the time of uploading the applications details, if sought by the investors in case of need.
22. Will there be any different treatment in allotment for ASBA and Non-ASBA form?
No. ASBA forms will be treated similar to the non – ASBA forms while finalizing the basis of allotment.
23. What happens when the issue fails / is withdrawn?
In case the issue fails/withdrawn the SCSB unblock the application money from the bank accounts upon receiving instructions from the registrar.
24. In case of any complaints regarding ASBA application whom can I approach?
In case of any complaints, the investor shall approach the bank, where the application form was submitted or the registrars to the issue.