If you are new to the stock market, then you might have heard about ASBA and CASBA quite a lot. But you might not know what exactly these terms are. Well, in this post, we are explaining what is ASBA and C-ASBA, their importance, and the different CASBA charges in Nepal.
What is ASBA?
ASBA stands for application supported by blocked amount. When investors purchase publicly issued securities (IPO, FPO, Debentures), the ASBA system withholds the equivalent amount from a bank account. This means the ASBA system blocks the amount from the respective account holder until the allotment of shares. If respective Demat holders are allotted the shares, then the amount is deducted from the bank account. If not allotted, the blocked amount is released by the system. This way individual investors should not pay extra money to the issuers making the payment easier.
Securities Board of Nepal (SEBON) has given permission to Bank and Financial Institution to provide ASBA service. Those approved BFI’s can prove the ASBA service to the individual investors. As of June 2021, there are 65 C-ASBA registered banks and financial services in Nepal.
What is C-ASBA?
On Falgun 11 2074, CDS and Clearing limited implemented an advanced form of ASBA system called C-ASBA. SEBON also initiated the ASBA process that enabled individuals to apply for shares through their banks. Now, with the help of this system, investors can buy IPO, FPO, Right Shares, Mutual Funds, Debenture online through the Mero Share service.
C-ASBA is a kind of centralized system that links all the BFI’s which provide ASBA related services. The computerized system allows individuals’ data to be linked with the Beneficiary Owner’s ID (BOID).
C-ASBA Registration Number (CRN) is the unique number that connects BOID (Demat Number) and the Bank Account of Investors. CRN number is provided by the respective banks to the investors after verifying the BOID. Only those who obtained CRN can apply for the publicly issues securities such as IPO, FPO, Right Shares, Mutual Funds, Debentures.
Difference between C-ASBA and ASBA
- Application Supported by Blocked Amount (ASBA) is a process for applying to public/rights issues submitted by investors by blocking the application money in their bank account while subscribing to the issue.
- C-ASBA will ensure centralized posting and verification of bank account numbers and DMAT account numbers ease monitoring of double application for issue managers and share registrars, cancellation of application upon double applications, and prepare a final report for securities allocation.
- Mero Share is the online system developed by Central Depository System & Clearing (CDSC) through which the investors can apply for IPO, FPO, Rights issues, Mutual Funds, Debentures once they are registered through C-ASBA.
- To get the C-ASBA facility, just get the form from ASBA Member BFIs and submit it.
C-ASBA Charges in Nepal
Following are the C-ASBA charges by different BFIs.
|Bank||Remit Muddati||Muddati (Bachat Khata)|
|Prime Commercial Bank||11%||12%|
|NMB Bank||1% Extra on Individual FD||12%|
|Global IME Bank||1% Extra on Individual FD||12%|
|Century Commercial Bank||11%||12%|
|Rastriya Banijya Bank||11%||12%|
|Nepal Investment Mega Bank||11%||12%|
|Laxmi Bank||Not updated||12%|
|Nepal SBI Bank||11%||12%|
|Bank of Kathmandu||1% Extra on Individual FD||12%|
|Standard Chartered Bank||11.03 %|
How to Apply in IPO, FPO, Right Share, Mutual Funds, Debenture from Mero Share?
Applying for public issues like ordinary shares, debentures and mutual funds from Mero Share is easy. There are both applications, and websites for this facility. Check out the following video to know how to apply for public issues through the Mero Share application.
- Nepali Banks With Free CASBA Service
- Dividend History of Global IME Bank Limited
- Dividend History of Nabil Bank
- Dividend History of Mega Bank
- CASBA Charge of Nepali Banks