Application Supported by Blocked Amount (ASBA) a simple and convenient way of investing in IPOs through ASBA facility.

ASBA is an application containing an authorisation 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 account only if his/her application is selected for allotment after the basis of allotment is finalized, or the issue is withdrawn / failed.

It is a supplementary process of applying in Initial Public Offers (IPO), right issues and Follow on public offers (FPO) made through book building route and co-exists with the current process of using cheque as a mode of payment and submitting applications.

Investors applying using the ASBA form reap the following benefits:

•  No loss of interest, since the application amount is not debited to the savings account on application. 
• The amount for which no shares have been allotted is available immediately on completion of allotment process. There is no need to wait for the amount to be refunded by the company and be credited to the account. 
• Since the amount is available in the account, it is considered for calculation of the Average Quarterly Balance (AQB). 
• Customer can revise/withdraw the bid before the end of the Issue in the prescribed format with the Bank.

To apply for IPO, please login to your Internet Banking Account from AU 0101 or Net Banking > Investments > IPO (ASBA)

Investor can also submits the ASBA form after filling all the details like name of the applicant, PAN, demat account number, bid quantity, bid price and other relevant details to their bank branch by giving 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 shall ensure that the details that are filled in the ASBA form are correct, otherwise the form is liable to be rejected.

When applied using the ASBA form, the investors would not have to pay the money during IPO application. The amount would be retained in the investor's bank account and blocked for the IPO application.

Yes, ASBA is entirely safe as it is a process developed by SEBI. Through ASBA, when you subscribe, only the application money gets blocked and not your entire account. Only if allotment happens will the blocked amount be deducted from your account. If the issue is withdrawn or rejected, your funds automatically get unblocked. Hence, ASBA is safe as your funds remain perfectly safe in your account.

In the event of valid withdrawal, the bid is deleted in stock exchanges platform and application money is unblocked in the bank account.