ASBA : What is ASBA

The expansion of ASBA is Applications Supported by Blocked Amount. It is a procedure that is developed by the SEBI (securities and exchange board of india) for applying to Initial public offer (IPO). In ASBA, the account of IPO applicant doesn’t get debited until shares are allotted to them.

ASBA is a supplementary procedure for applying in public issues floated by the organizations. ASBA can be employed for Rights Issues, IPO & FPO, Debt Issues and Mutual Funds. In ASBA, funds will continue to earn interest throughout the processing period of application. Bank will mark a lien on the deposit account of the investor to the extent of the application money. Lien will be removed instantly after finishing of the basis of allotment. If bid is get successful, the shares allotted will be transferred to the demat account of applicant.

An Investor can apply via ASBA if 

1. He/she is eligible to apply in IPO according to SEBI guidelines.

2. He/she is having a current or saving account in a bank.

3. He/she is having Demat account with any of the DP with PAN card number.

4. He/she has enough clear credit balance in his/her current or saving bank account for application money.

NEFT - National Electronic Fund Transfer

The expansion of NEFT is National Electronic Fund Transfer. By using this system individual, firm or corporate can transfer the funds electronically from any bank branch to any other individual, firm or corporate having account in other bank branch in the country.  

This payment network is kept by RBI. NEFT system is a funds transfer technique where transfer of fund occurs from one bank to another on a deferred net settlement basis. To provide the facility of NEFT to the customer the bank branch has to be NEFT enabled. To perform any transaction by using NEFT, IFSC (Indian Financial System Code) code is required. This code specifies the branch of a bank. 

 Some important points about NEFT are as follow:
 

1. In NEFT the transaction can be take place between two NEFT enabled bank branches. It can also be employed to transfer funds from or to NRE/NRO accounts in India. Remittance is not permitted to a foreign country, apart from Nepal.
 

2. In NEFT transactions are bunched up and executed in a bunch at specified time slot. In weekday there are 12 settlements that take place from 8 am to 7 pm, and on Saturday there are only 6 settlements that take place from 8 am to 1 pm. If a transaction is started after a batch settlement time, it is postponed to the next batch.
 

3. There is no lower or upper limit on the amount that can be transferred under NEFT.
 

4. There are some charges are applied on outward transaction while inward transaction are free. This ranges 

from a minimum of Rs 2.50 for amounts up to Rs 10,000 to a maximum of Rs 25 for transfer amounts above Rs 2 lakh.

RTGS : What is RTGS

The expansion of RTGS is "Real Time Gross Settlement". It is maintained by reserve bank of India. RTGS is a money transfer technique where transfer of money occurs from one bank to another on a ‘real time’ and on ‘gross’ basis. RTGS can be described as  continuous (real-time) settlement of funds transfers independently on an order by order basis. This technique is known as fastest money transfer technique. 

The word ‘real time’ means that trasaction is executed at the time they are received, there is no waiting period.  Conversely ‘Gross settlement’ means the settlement of fund occurs one to one basis without bunching with other transactions. Once the money transfer take place in the book of RBI, the payment is considered as final and irreversible.

RTGS is a large value funds transfer technique. In RTGS System the minimum value of trasaction is RS 2 lakh. There is no upper limit for transaction. Customers can use the facility of RTGS between 9 am to 4:30 pm on Monday to Friday and 9 am to 1:30 pm on Saturdays.

Base Rate : What is Base Rate

The minimum rate of interest below which any bank is not allowed to lend any loan excepting certain exceptions.  It is the minimum rate of interest that a bank is permitted to charge from its customers. According to the rule of RBI no bank can recommend loans at a rate lower than the Base Rate to any of its customers.

Benchmark prime lending rate has been replaced by the base rate and it effected from july 1,2010. Base Rate shall involve all those elements of the lending rates which are common across all categories of borrowers. Banks may select any benchmark to reach at the Base Rate for a particular tenor that may be disclosed transparently. 

All the banks has same base rate.  Although, banks have the freedom to select any benchmark to arrive at a single Base Rate but the similar requirements to disclosed transparently.

Present Base Rate: 9.80% – 10.25%