SVC Bank, formally known as The Shamrao Vithal Co-op. Bank Ltd, launched Application Supported By Blocked Amount (ASBA) -- the online payment facility that is mandatory for IPOs/ FPOs and rights issues.
ASBA is a hassle-free arrangement payment system that ensures that funds are not blocked unproductively till the finalization of the allotment of the issues. It was first introduced in September 2008 and was made mandatory by the SEBI with effect from January 1, 2016.If an investor is applying through ASBA, his/her application money shall be debited from the bank account only if the application is selected for allotment after the basis of allotment is finalized, or the issue is withdrawn / failed. This was not the case earlier, when investors had to wait for refund for up to two weeks. The earlier process required investors to get demand drafts made or issue cheques for payment of application money, which was more time consuming.
With SVC Bank introducing the ASBA facility, its customers can now avail of a seamless experience through the simple and convenient facility of investing in IPOs. ASBA boasts of several benefits because the investor's money does not go out of his or her account. There is no hassle of refund as per the difference in application amount and the amount for which shares are finally allotted. The investor continues to earn interest on the application money since it remains in the bank account, which is not the case in other modes of payment.
With the launch of this service, SVC Bank -- one of India's top three urban co-operative banks - is now a Self Certified Syndicate Bank (SCSB). ASBA facility is available at all 198 branches of SVC Bank and is open to investors who have a Savings account with the bank. To apply for the facility, customers can visit the nearest SVC Bank branch. With the new service, SVC Bank has taken a step forward to meet the needs of common investors and customers by bringing in the convenience of the ASBA facility mandatory for IPOs in their own bank. Customers can also be more assured because they are going through their own bank -- a known mediator.
Mr. Suhas Sahakari, Managing Director - SVC Bank said, "Sources state that IPO registrations in BSE and NSE this first quarter have crossed more than $USD 600 million. There is a sense of optimism developing as people are reducing aversions, getting ready to take calculated risks. When we announced the launch of the ASBA facility, the background was to provide this optimistic customer a platform to invest and grow. With customers generally preferring a trusted intermediary to get access to IPOs, SVC Bank is happy to provide an investor friendly solution while continuing to maintain personalised banking approach for which we have been known for the past 111 years. We are glad to be an SCSB and we appeal to our customers to make the most of this facility."