IPOs Funding: Earn Interest On SBI's Savings Account While You Wait For Shares Application Process
SBI has devised a way to allow the investors continue earning interest while he/she applies for the process of IPO (Initial Public Offers)/ FPO (Follow-On Public Offers). The process is known as ASBA (Applications Supported by Blocked Amount) wherein your deposit amount is put under lien while the application process kicks off, mentioned SBI on its portal-bank.sbi. Let's say that the entire process of issue of shares takes 3 months, the bank will, credit your savings account with the proportionate interest for those three months until you are allotted the shares. And as and when this happens, the account will be debited with the amount and the similar amount of shares will be credited.
Terms and conditions for applying through SBI's ASBA:
1. The investor must maintain Savings Bank or Current Account with SBI.
2. Investor must also have a Demat account with any of the DPs along with Permanent Account Number (PAN).
3. He/She must have sufficient clear credit balance in his/her Savings Bank or Current account for application money. ASBA facility is not available on any type of overdraft or loan accounts, added SBI on the website.
Steps to apply for SBI's ASBA online:
1. Â Â User can apply electronically without the need of any physical application form. Internet Banking users should log on to www.onlinesbi.com and go to e-services> IPO (Equity) ASBA or IPO (Debt) ASBA option. It is not necessary to have a Demat account with SBI for applying through ASBA. Customer having Demat account with other entities can also apply through the SBI- ASBA facility, said SBI.
2. Â Â All SBI customers, irrespective of the branch where they maintain account, can apply through Internet Banking. Any SBI customer, who has a Savings or Current Account, can register for Internet Banking facility and apply for ASBA.
Other Details
ASBA facility allows investor to continue earning interest during the application process of IPOs FPOs Rights Issues and Debt Issues. According to SBI, ASBA is a supplementary process for applying in public issues. Under ASBA, funds will continue to earn interest during the application processing period, if held in an interest bearing account, added SBI on the portal.
What is ASBA? The facility allows an investor to continue earning interest during the application process of IPOs, FPOs, Rights Issues and Debt Issues. To know how this works, visit https://t.co/5lmWd2D80N#SBI #StateBankOfIndia #StateBank #SBIASBAFacility #ASBA #IPO #FPO pic.twitter.com/3HVy4TVrHs— State Bank of India (@TheOfficialSBI) March 22, 2018
According to State Bank of India (SBI), the lender will mark a lien on the deposit account of the investor to the extent of the application money. The lien will be removed immediately after finalization of the basis of allotment. If bid is successful, the deposit account will be debited and the alloted shares will be transferred to the applicant's Demat account, said SBI.
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