On 13th September, SEBI has directed banks to clearly demarcate separate accounts for public offer applications, filed under ASBA (Application Supported by Blocked Amounts) facility under which money remains in the investors' accounts till the time of share allotment.
“Some banks while making applications on own account using ASBA facility are doing so without having clear demarcated funds and that some banks are marking lien against credit limits / overdraft facility of their account holders’ for ASBA applications,” capital market regulator said in a circular.
SEBI has advised banks to ensure that for applications made by any investor using ASBA facility, the banks shall block the application amount only against/in a funded deposit account and ensure that clear demarcated funds are available for ASBA applications.
SEBI has also advised banks to ensure that for making applications on own account using ASBA facility, they should have a separate account in own name with any of the SEBI registered banks. Such account shall be used solely for the purpose of making application in public issues and clear demarcated funds should be available in such account for ASBA applications.
The new directions would come into force with immediate effect.