Definition
ASBA
ASBA (Application Supported by Blocked Amount) is the mechanism where IPO application money stays blocked in the investor's bank account until shares are allotted.
Under ASBA, when you apply for an IPO the amount is only earmarked and frozen in your account — you keep earning interest on it — and is debited only if and to the extent shares are allotted. Unblocked funds are released without a separate refund. SEBI has made ASBA mandatory for all public issues.
ASBA replaced the old system where investors wrote cheques and waited weeks for refunds. For retail and small investors it now runs largely through the UPI mandate route, while larger applicants use bank ASBA directly.
Related terms
- UPI Mandate (IPO)A UPI mandate is the pre-authorisation an IPO applicant approves in their UPI app to block the application amount until allotment.
- Self-Certified Syndicate Bank (SCSB)An SCSB is a bank registered with SEBI to offer ASBA, blocking and releasing IPO application funds in investors' accounts.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.