CASBA charge is very popular among the investors of public companies when applying for the initial public offerings (IPO). If you are applying for initial public offerings (IPO), you might already know that a certain fee is deducted as the CASBA charge from your bank account. Some people also refer ASBA charge as the IPO charge. This is in fact a service charge.
In this article, we will know about the ASBA/CASBA charges of different commercial banks in Nepal. And know why the bank charges the CASBA fee while applying for IPO?
What is ASBA?
The full form of ASBA is Application Supported by Blocked Amount. ASBA is a service charge deducted by the Bank which provides the service of blocking an amount equal to the amount required if the applied quantity of share is allotted to the account holder.
In this way, banks help the account holder to prevent using that part of the amount which will be enough at least to buy the applied quantity of shares. ASBA charge can be said as a charge deducted by the bank while fulfilling the account holder’s standing order. With the ASBA service, investors applying for publicly issued securities can directly invest from their own Bank account.
If you apply for IPO through Meroshare, at the same time you will also trigger your bank for blocking the specific amount on your account. In such a case, the centralized system of ASBA informs banks to hold that certain amount and the bank does the same.
After allotment of the applied IPO, if any number of shares is allotted to the account holder, the amount required for the allotted quantity of securities gets deducted. And the rest of the amount gets released as usable balance.
As the ASBA charge is independently charged by the bank, there is no relation between the charge and the allotment of shares. Also as the amount is not debited immediately, you will continue to receive the promised interest rate on the blocked amount.
What is CASBA?
CASBA is an organized and centralized form of ASBA. CASBA is developed by CDSC that links all the Banks and Financial institutions providing ASBA service and the Demat accounts creating a centralized system. The Centralized Application Supported by Blocked Amount (CASBA) service makes the application verification process easy. The C-ASBA system came into implementation from Falgun 11, 2074.
To use the C-ASBA service, one must obtain CASBA Registration Number (CRN). Otherwise, it wouldn’t be possible to apply for IPO from their own Bank account. CRN is the way that shows the link between the bank account and the Demat account of the person applying for IPO.
There are two ways to apply for IPO in Nepal. One is online through MeroShare, and another method is by visiting the Bank and filling out the ASBA form. In both cases, you may have to pay an extra amount for the CASBA service depending on the Bank. The amount of the CASBA charge depends upon the bank you are choosing to apply for the IPO.
ASBA/ CASBA Charges of Commercial Banks in Nepal
C-ASBA charge is a service charge deducted by banks for providing amount block service on demand.
ASBA charges are different in different Banks and some of the commercial banks are still providing this service even for free. Therefore, we decided to research and present the data of ASBA charges of different commercial Banks in Nepal. The following is the list of C-ASBA / ASBA charges deducted by Commercial Banks in Nepal while applying for IPO.
| Bank | ASBA / CASBA Charges |
|---|---|
| Mega Bank Limited | NPR 0 (Free) |
| Nabil Bank Limited | NPR 0 (Free) |
| NIC Asia Bank Limited | NPR 0 (Free) |
| Rastriya Banijya Bank Limited | NPR 0 (Free) |
| Nepal Bank Limited | NPR 10 Per Application |
| Siddharth Bank Limited | NPR 10 Per Application |
| Agriculture Development Bank | NPR 10 Per Application |
| Bank of Kathmandu Limited | NPR 10 Per Application |
| Civil Bank Limited | NPR 10 Per Application |
| Nepal Bangladesh Bank Limited | NPR 10 Per Application |
| Machhapuchchhre Bank Limited | NPR 10 Per Application |
| Prabhu Bank Limited | NPR 10.00 Per Application |
| Prime Commercial Bank Limited | NPR 10.00 Per Application |
| Sunrise Bank Limited | NPR 10.00 per application for MeroShare users. And NPR 25 per application, Applying through C-ASBA visiting the Bank. |
| Global IME Bank Limited | NPR 15 Per Application |
| Citizen Bank International Limited | NPR 20.00 Per Application |
| Everest Bank Limited | NPR 20.00 Per Application |
| Himalayan Bank Limited | NPR 20.00 Per Application |
| Kumari Bank Limited | NPR 20.00 Per Application |
| NMB Bank Limited | NPR 20.00 Per Application |
| Nepal Credit and Commerce Bank Limited | NPR 10.00 per Application |
| Nepal Investment Bank Limited | NPR 20.00 Per Application |
| Sanima Bank Limited | NPR 20.00 Per Application |
| Century Commercial Bank | NPR 25.00 Per Application |
| Nepal SBI Bank Limited | NPR 25.00 Per Application |
| Laxmi Bank Limited | NPR 25.00 Per Application |
| Standard Chartered Bank Nepal Limited | NPR 100.00 Per Application |
The C-ASBA charge is revised by Banks from time to time. If you find anything incorrect, please let us know in the comment section below.
Many Banks that used to provide free C-ASBA service have started to charge some amount for this service. The reason behind it is, that in the current scenario, many companies are making an initial public offering. Similarly, the number of investors applying for IPO has also increased drastically. Which is helping the Banks and Financial institutions to make easy revenue from the C-ASBA service.
A bank that is able to collect 100,000 applications can now earn NPR. 20-25 lakhs per IPO from the service which they were providing for free. Therefore, we can see the change in IPO charges in Nepal.
Banks Providing Free ASBA Service In Nepal
Out of 27 commercial banks in Nepal, only 4 of them are providing CASBA service for free in Nepal.
- Mega Bank Limited
- Nabil Bank Limited
- NIC Asia Bank Limited
- Rastriya Banijya Bank Limited
Some Frequently Asked Questions
What is ASBA?
The full form of ASBA is Application Supported by Blocked Amount. In this service, Bank blocks money on the specified Bank account as per customers’ requirements. Such an amount will remain blocked on the customer account until the date of allotment of IPO/ FPO.
Which Banks in Nepal Offer Free ASBA?
The following Commercial Banks are Offering free CASBA services in Nepal.
- Mega Bank Limited
- Nabil Bank Limited
- NIC Asia Bank Limited
- Rastriya Banijya Bank Limited
Why Bank Deduct ASBA charge?
Banks debit a small amount as ASBA charge for providing the service of blocking an amount equal to the amount required if the applied quantity of share is allotted to the account holder.
Can I Earn Interest in ASBA?
Yes. You can earn interest on ASBA (the amount blocked in the bank account while applying for IPO)
As you submit the application, your money gets blocked in the account until the allotment of the shares. The amount as per the allotment is debited from your bank account only after the allotment process.
Therefore, you will continue to earn regular interest in the application supported by the blocked amount (ASBA) held in the account during the time frame.
Why ASBA is Important?
Through ASBA, you can apply for shares during Initial Public Offering (IPO), Further Public Offer (FPO) or Mutual Fund, through your bank account.
Which Bank has the highest amount of ASBA charge?
Standard Chartered Bank charges the highest amount of ASBA charge which is NPR 100 per application.
How much is the ASBA charge of Prabhu Bank?
The Asba charge of Prabhu Bank Limited is NPR 10. Previously, it was NPR 1 per application and increased to NPR 10 from 1st April, 2020.
How much is the C-ASBA charge of Sunrise Bank Limited?
The C-ASBA charge of Sunrise Bank Limited is NPR. 10 only for MeroShare users. For others who are applying through C-ASBA visiting the Bank, Sunrise Bank will charge NPR 25 per application.
Also, Check Out
Sir, Kun bank ma account kholda ramro service milla? Please Vandinus Sir !!
I recommend NIC ASIA (free) and you can apply for IPO from their Mobile Banking App without even logging in to MeroShare Account.
Malai aaj voli lagx commercial bank haru jati nai free gare Pani paxi gayer free vadaune lagx government bank is best low rate hunx sabai
sir,
now ASBA/ C-ASBA Charges my bank account how do change other bank a/c on free charges service ASBA please give me process.
If you have Bank Ac on non-ASBA charging Banks, you can simply request for bank change from MeroShare and go to nearest branch of that bank.
Currently, Sanima bank is also charging rs 20 per IPO application as C-ASBA charge.
Gradually every Bank will charge. Banking services are getting costlier in a Country Like us.
Currently, Siddhartha Bank is also charging Rs 10 per IPO
Civil Bank ltd
C-ASBA charge is Rs20 from 23, February all commercial bank are for own benefit
It sounds like a bank robbery. Even if you charge this fee, everyone should have the same rate, but if that is not the case, then there is a law. It should be improved. Please correct it.Thank you
Nepal bank limited ko 25 per year hoki 10 per application ho ? 10 per application vanne Sunya theeya
Currently, the IPO charge of Nepal bank limited is Rs 10 per application.
I think CASBA should be free as there is no guarantee if you are getting IPOs allotted or not.
Paying to apply and not only a few thousands there are millions of Nepalese who apply for IPO and pay these charges.
Paying banks for no reason at all!
This is not related to allotment. They deduct it as a charge for providing the blockage service. However, it can still be reduced to Rs. 5 to a maximum of Rs. 10.
ASBA or CASBA charge is sometime also referred as IPO charges? But is it legit to say IPO charge for ASBA charge?
My friends often say IPO charge while applying for the IPOs. But in my opinion it is a type of service charge deducted by bank as you have stated above