BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Application Supported by Blocked Amount
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Application Submitted with Blocked Amount
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Acquired Shares by Blocked Amount
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Application Supported by Balance Amount
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Detailed explanation-1: -What is “ASBA”? ASBA means “Application Supported by Blocked Amount”. ASBA is an application by an investor containing an authorization to Self Certified Syndicate Bank (SCSB) to block the application money in the bank account, for subscribing to an issue.
Detailed explanation-2: -Application Supported by Blocked Amount (ASBA) 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only if his/her application is selected for allotment after the basis of allotment is finalized, or the issue is withdrawn / failed.
Detailed explanation-3: -ASBA 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.
Detailed explanation-4: -ASBA stands for “Application Supported by Blocked Amount". It is an IPO application process developed by SEBI that allows the application money to be blocked in the bank account for bidding in an IPO. Investors cannot use the blocked amount but continue to receive interest on the blocked amount.
Detailed explanation-5: -SEBI has mandated the ASBA facility for all investors to reduce the timeline for refund initiation. Under ASBA, investors continue to earn interest on the blocked amount during the IPO application process. Once the allotment completes, then your syndicate bank will remove the lien on the blocked amount.