SEBI approved the first set of banks to provide the new IPO payment facility 'Applications Supported by Blocked Amount (ASBA)'.
Corporation Bank, Union Bank of India and HDFC Bank are now officially designated as Self Certified Syndicate Banks (SCSBs) to process IPO allocations through ASBA method.
After facing IPO refund problems for a long time, now an investor who has account with these three banks can apply in IPO's without transfer the money to the Issuer Company. In this method IPO bidding amount remains in investors account, but blocked by the bank until allotment is done. If there is no allotment, the amount would be released by bank, and the investor could be able to use it immediately.
This process will reduce the refund time and other problems like missing cheques or incorrect account information. This will also help companies to list there stocks quicker, as they need not to send refund order.
For more information about 'Applications Supported by Blocked Amount (ASBA)' payment Method visit: