ASBA (Applicaiton Supported by Blocked Amount) Nepal

 ASBA is a facility introduced by Inida's SBBI in 2008 for the purpose of subscribing in an IPO. This was introduced to stop blocking of investor funds in the hands of company if the shares were not allotted to the investor.

Application supported by blocked Amount (ASBA) Process, is the alternative payment method (optional) for IPO application where the IPO bidding amount remains in investors account, but blocked by the bank until allotment is done. if the investor gets allotted the amount would be automatically debited and if the investors does not get allotted his amount remains unblocked.

There are some sonditions for applying through ASBA process:

1. Allowed to block funds in his bank account till date of allotment. 

2. The ASBA investor should not be bidding under any of the reserved categories.

3. An ASBA investor cannot revise his bid.

4. The ASBA investor should be bidding at cut-off, with single option as to the number of shares bid for

It helpful both to the company and investor, as the investor gets his refund faster and as companies cannot list there shares before completing the refund process, ASBA will reduce the loan on refund process and ultimately will make the listing process faster.

C-ASBA

ASBA means "Application Supported by Blocked Amount" ASBA is an application containing an authorization to block the application money in the bank account, for subscribing to an issue.

C-ASBA or centralized application supported by blocked amount is an advance form of the existing ASBA interface which is claimed to be more user friendly. 2 years the securities Board of Nepal (SEBON) lunched the C-ASBA process the enabled investors to apply to buy shares of listed companies online through their bank accounts.

Demat Account

    Demat account is an account that is used to hold shares and securities in electronic format. The full form of Demat account is a dematerialized account, The Purpose of Opening a Demat account is to hold shares that have been bought or dematerialized (converted from physical to electronic shares), thus making share trading easy for the users during online trading. 

In Nepal, Demat Account service is provided bu CDSC through intermediaries , Bank, Depository participant. Stock Broker. The charges of Demat account vary as per the volume held in the account, type subscribed, and the terms and conditions laid by the depository and the stock broker.

What is the purpose of Demat account?

    Demat account of dematerialised account provides facility of holding shares and securities in electronic format. During online trading, shares are bought and held in a demat account, thus facilitating easy trade for the users. A Demat account holds all the investments an individual makes in shares, government securities, exchange-traded funds, bonds and mutual funds in one place. 

What is dematerialisation?

    Dematerialisation is the process of concerting the phycial share certificates into electronic form, which is a lot easier to maintain and is accessible from anywhere throughout the world. An investor who wants to trade online needs to opens a Demat with a Depository Participant (DP).