Self Certified Syndicate Bank (SCSB)

A Self Certified Syndicate Bank (SCSB) is a bank that has been authorised by the Securities and Exchange Board of India (SEBI) to act as a collecting bank for applications made through the Application Supported by Blocked Amount (ASBA ) facility in public issues. The SCSB receives the ASBA application from a retail or high-net-worth investor, verifies the application, blocks the application amount in the applicant’s designated bank account, transmits the application data to the stock exchange, and manages the release or transfer of blocked funds after the allotment outcome is determined.

The SCSB framework is defined in SEBI’s Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018 (previously the ICDR Regulations, 2009), and in SEBI’s operational circulars on ASBA. As of 2025, approximately 80-90 banks are listed as SCSBs by SEBI, spanning public sector banks, large private sector banks, small finance banks, and a limited number of cooperative banks that have met SEBI’s eligibility criteria.

Role and function

Fund blocking

The central function of the SCSB is to block funds in the applicant’s savings or current account rather than transferring them to the issuer or a third-party escrow. The investor submits an ASBA application specifying:

• The number of shares applied for.
• The bid price (within the price band set by the issuer).
• The designated bank account at the SCSB from which the funds will be blocked.

On receiving the application, the SCSB verifies that the account has sufficient balance and places a lien (block) on the amount equal to the bid value. The account continues to earn interest on the blocked balance. The applicant cannot withdraw the blocked funds until the lien is released by the SCSB.

Application data transmission

The SCSB transmits the application details, PAN, DP ID, client ID, bid quantity and price, and block confirmation, to the stock exchange (BSE or NSE, or both). The exchange’s bidding platform aggregates all ASBA bids from all collecting channels (SCSBs plus broker platforms using UPI ASBA plus clearing-member ASBA).

Post-allotment fund management

After the allotment is determined by the registrar and transfer agent (RTA):

• For allotted applicants: The SCSB debits the allotment amount from the applicant’s account and transfers it to the issuer’s designated account through the clearing corporation.
• For unallotted or partially allotted applicants: The SCSB releases the lien (or the unallotted portion of the lien) immediately on receiving the allotment instruction. No transfer occurs and the full (or residual) blocked balance is restored to the applicant’s freely available balance.

The SCSB bears the credit risk on the blocked account between application date and allotment date. If the applicant’s account balance falls below the blocked amount (due to other debits) between these dates, the SCSB is responsible for the shortfall, a risk that SEBI regulations address by requiring SCSBs to block funds at the time of application, not merely to certify their availability.

SEBI eligibility criteria

SEBI does not automatically recognise all banks as SCSBs. A bank that wishes to participate must self-certify to SEBI that it:

• Has a Core Banking Solution (CBS) capable of placing and releasing account liens electronically.
• Has a SEBI-registered depository participant arm or a tie-up with a depository participant for verifying DP IDs.
• Can transmit application data electronically to the stock exchange through SEBI’s prescribed format.
• Has sufficient branch or internet banking coverage to receive ASBA applications from retail investors.
• Has the technical and operational capacity to manage high-volume application processing during peak IPO subscription windows.

SEBI publishes and maintains the list of SCSBs on its website (https://www.sebi.gov.in ). The list is updated when new banks are admitted or when existing SCSBs are suspended or derecognised. Investors can verify whether their bank is an SCSB before submitting an ASBA application.

History of the SCSB framework

Origins in the ASBA mechanism

The ASBA mechanism was introduced by SEBI through Circular SEBI/CFD/DIL/ASBA/1/2009/30/12 in December 2009, initially as an optional facility for retail investors in public issues. Before ASBA, all IPO applicants were required to submit cheques drawn in favour of the issuer company. The cheque amount was realised (debited from the investor’s account) immediately on application, and refunds to unsuccessful applicants could take 10-15 banking days. During this period, the investor’s funds were unavailable and earned no return.

The ASBA mechanism redesigned this: instead of issuing a cheque, the investor authorises their bank (the SCSB) to block the application amount. The funds remain in the investor’s account (earning interest), are not transferred to anyone during the subscription period, and are only debited if and when allotment occurs.

SEBI progressively expanded ASBA:

• 2009: Optional for retail investors.
• 2011: Mandatory for High Net Worth Investors (HNI category).
• 2012: Mandatory for Qualified Institutional Buyers (QIBs).
• 2016: Mandatory for all investor categories in main-board IPOs.

UPI ASBA as the retail evolution

The introduction of UPI ASBA in 2019 extended the ASBA concept to a mobile-first flow, allowing retail investors to apply from any broker app without needing to log into their bank’s netbanking portal. The UPI mandate replaced the SCSB’s direct block instruction; the PSP bank replaced the SCSB as the fund-blocking intermediary for UPI ASBA retail applicants.

From May 2022, SEBI mandated UPI ASBA for all retail individual investor applications in main-board IPOs. Bank ASBA via SCSB remains mandatory for HNI and QIB applicants, and remains available (but not mandatory) for retail investors who prefer the bank ASBA route.

Bank ASBA vs UPI ASBA

The original ASBA mechanism (sometimes called bank ASBA or SCSB ASBA) requires the applicant to submit a physical or internet-banking form through their SCSB. The SCSB receives the application directly. This route is available to all investor categories (retail, HNI, QIB) and has no upper limit on application size.

UPI ASBA, introduced by SEBI in 2019 and mandatory for retail individual investors from May 2022, routes the application through a broker or stock exchange intermediary, with the UPI mandate substituting for the bank’s block instruction. In UPI ASBA:

• The investor applies through a broker, stock exchange platform or RTA’s investor portal.
• The broker transmits the application to the exchange.
• The exchange’s sponsor bank sends a UPI mandate request to the investor’s UPI-linked bank account.
• The investor approves the mandate in their UPI app; the Payment Service Provider (PSP) bank places the block.
• The investor’s bank is not the SCSB; the sponsor bank acts as the collecting bank.

Under UPI ASBA, the role of the SCSB is partially replaced by the sponsor bank and the PSP bank combination. However, SCSBs retain relevance for:

• Non-retail applicants (HNI, QIB) who cannot use UPI ASBA.
• Investors who prefer direct bank ASBA via their SCSB’s netbanking interface.
• Investors whose banks are SCSBs but not on the NPCI-approved PSP list.

For a comparison of bank ASBA (via SCSB) and UPI ASBA (via PSP bank), see Payment Service Provider (PSP) bank .

Settlement flow

The ASBA settlement chain for a bank ASBA application:

1. Day 0 (application): Investor submits application at SCSB branch or through SCSB netbanking. SCSB blocks funds and uploads application to exchange.
2. Days 0-3 (issue period): Funds remain blocked. Exchange aggregates bids.
3. Issue close + 1 day: Bidding data finalised. Price discovery / book building completed.
4. Allotment day (T+6 or T+7 per SEBI timelines): RTA determines allotment. Instructions sent to clearing corporation.
5. T+6 or T+7: SCSB debits allotted amount; clearing corporation credits issuer account. SCSB releases unallotted blocks.
6. T+6 or T+7: Allotted shares credited to investor’s demat account by the depository (NSDL or CDSL).

SEBI has progressively compressed the IPO settlement timeline. The T+6 listing timeline (from issue close to listing) was achieved for most issues by 2023; T+3 for UPI ASBA issues on voluntary basis from 2024.

Sponsor bank distinction

In UPI ASBA, the sponsor bank is the bank engaged by the issuer to manage the UPI mandate collection for the issue. The sponsor bank is distinct from the SCSB:

Investor experience: bank ASBA vs UPI ASBA

For retail investors, the practical difference between bank ASBA and UPI ASBA is significant:

For investors who maintain large application amounts (above ₹2 lakh, which falls in the HNI / Non-Institutional Investor category), bank ASBA via SCSB is not merely an option but the only permitted mechanism. UPI ASBA is restricted to the retail individual investor category, with an application cap of ₹2 lakh (previously ₹2 lakh; subject to SEBI revision).

Notable SCSBs

SEBI’s list as of 2025 includes all major scheduled commercial banks, including:

• State Bank of India
• Punjab National Bank
• Bank of Baroda
• Canara Bank
• Union Bank of India
• HDFC Bank
• ICICI Bank
• Axis Bank
• Kotak Mahindra Bank
• IndusInd Bank
• Yes Bank
• IDBI Bank
• Federal Bank
• RBL Bank
• City Union Bank

The complete list, including small finance banks and urban cooperative banks that have been admitted as SCSBs, is available at https://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListing=yes&sid=1&ssid=7&smid=0 .

Technical infrastructure requirements

SCSBs must maintain and certify the following technical infrastructure to SEBI and the stock exchanges:

CBS integration

The Core Banking System at an SCSB must support the lien-marking function in a manner that is:

• Atomic: The lien is either placed in full or not at all; partial liens are not permitted.
• Real-time: The lien must be placed and confirmed to the exchange’s bidding system within defined SLA windows (typically within 30 minutes of application receipt during business hours).
• Reversible: The SCSB must be able to release liens individually (for specific applications) or in bulk (for all non-allotted applications after allotment determination).

Exchange connectivity

SCSBs must maintain active electronic connectivity to both BSE and NSE bidding platforms. Application data is uploaded in prescribed formats, and bid confirmations are received electronically. The SCSB must have redundant connectivity to the exchanges to ensure uninterrupted service during IPO subscription windows.

Reporting obligations

SCSBs file daily reports with the exchanges during an open IPO showing:

• Number of applications received.
• Total lien amount blocked.
• Applications rejected (with reason codes).
• Lien modifications (if investors revised bids).

Post-allotment, SCSBs report the completion of fund debits and lien releases to the exchanges and the clearing corporation.

Operational responsibilities of an SCSB

Application verification

When an investor submits a bank ASBA application, the SCSB performs the following checks before blocking funds:

• PAN verification: The investor’s Permanent Account Number (PAN) must match the bank’s KYC records. Applications where PAN details do not match the bank’s records are rejected.
• Demat account verification: The SCSB verifies that the DP ID and client ID provided in the application belong to an active demat account. Verification is done through a query to the relevant depository (NSDL or CDSL).
• Balance sufficiency: The SCSB checks that the designated account has a balance at least equal to the application amount at the time of submission.
• Duplicate application check: SCSBs are required to screen for duplicate applications from the same PAN within the same issue. Duplicate applications result in rejection of all applications from that PAN in that issue.

Bid modification and withdrawal

During the IPO subscription window, investors who applied through bank ASBA can modify their bids (change quantity or price within permitted revisions) or withdraw their application by approaching the SCSB through which they applied. The SCSB processes the modification or withdrawal, updates the exchange’s bidding system, and adjusts the blocked amount accordingly.

Withdrawals result in immediate release of the lien; modifications that result in a lower bid amount result in partial lien release; modifications that result in a higher bid amount require the SCSB to verify additional balance availability.

Revocation handling

An investor who wishes to revoke a bank ASBA application approaches the SCSB branch or uses internet banking (where the SCSB provides this facility). The SCSB submits the revocation to the exchange and releases the lien. For UPI ASBA applications, revocation is handled through the investor’s UPI app (mandate revocation), not through the SCSB.

SCSB in rights issues and FPOs

The SCSB role extends beyond IPOs to other categories of public issues:

• Follow-on Public Offerings (FPOs): Same mechanism as IPOs. SCSBs receive ASBA applications for FPO bids.
• Rights issues: Shareholders entitled to rights shares apply through ASBA. The SCSB blocks funds from the shareholder’s account. Rights issue ASBA is available both through SCSBs (for bank ASBA) and through UPI (for UPI ASBA, introduced for rights issues in 2021).
• Non-convertible debenture (NCD) public issues: ASBA is used for retail NCD subscriptions. SCSBs participate as collecting banks.

Penalties and disciplinary framework

SEBI has the authority to take action against SCSBs that fail to meet their ASBA obligations. Historical SEBI enforcement actions in the ASBA space have included:

• Penalties for incorrect blocking amounts.
• Penalties for delayed fund release post-allotment.
• Suspension of ASBA facilities for SCSBs that repeatedly failed technical compliance checks.

Exchanges (BSE and NSE) also maintain SCSB performance monitoring and report persistent non-compliance to SEBI.

Related articles

• ASBA
• UPI mandate
• Payment Service Provider (PSP) bank
• Unified Payments Interface (UPI)
• NPCI
• How to approve a UPI mandate for an IPO application

References

1. SEBI, Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018, Chapter IV, ASBA provisions.
2. SEBI Circular SEBI/HO/CFD/DIL1/CIR/P/2019/62, Streamlining the Process of Public Issue of Equity Shares and Convertibles, Introduction of UPI as Payment Mechanism with ASBA for Retail Investors, May 2019.
3. SEBI Circular SEBI/HO/CFD/DIL2/CIR/P/2022/45, Streamlining of Application Process in Public Issues, UPI Mechanism, April 2022.
4. SEBI, List of Self Certified Syndicate Banks, https://www.sebi.gov.in , updated periodically.
5. SEBI Circular SEBI/HO/CFD/DIL2/CIR/P/2023/77, Optional T+3 Listing for Public Issues through UPI Mechanism, May 2023.
6. NPCI, UPI ASBA Operational Guidelines, 2022.
7. BSE, ASBA: Operational Manual for SCSBs, 2021.