ASBA or Application Supported by Blocked Amount is an application with an authorisation for blocking the amount required for applying to an IPO. The required amount is blocked and gets utilised towards the IPO only if the application gets an allotment. If there is no allotment, the amount is released to the customer’s bank account.
What are the benefits of ASBA?
Benefits of ASBA are:
1. The said amount remains in the customer’s bank account and thus continues to earn regular interest
2. There is no issue related to refund, because the amount gets blocked, and is not deducted from the account.
3. ASBA is a paperless facility and investors can use it to apply for IPO/FPO/Rights Issue
