but what wil be the interest which u will receive on lien amount , saving account interest or fd interest? MY RM told me that if lien is marked then saving interest i will get and not FD interest
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For that ASBA via net banking or UPI mandate also supported without breaking FD/Flexi FD to mark lien ?
Official Bank Policy vs RMs' Views
It is best to get the subject policy in writing from the bank itself, from your registered email account for accuracy, veracity and authenticity. This can then be quoted for further discussions with your bank, if required at a later date. RMs may or may not be acutely aware of the actual policies, which are inherently dynamic in nature.
My Rationale
As per my rationale, a lien does not imply breaking of the sweep-in FD. It just blocks a given amount to offset a particular transaction in the near future. The sweep-in FD remains intact and maintains its integrity till such time it is actually broken i.e. till such time the full/partial funds as per the lien are actually debited from the account for the allotment of IPO shares/bids and this debit amount results in debit from the savings account and/or break-up of the sweep-in FD, as per the bank's policy on such aspects. As such, the lien is on the principle amount of sweep-in FD and not the interest accrued till the date of lien.
So, as I see it, the sweep-in FD should keep accruing FD interest till such time it is actually broken.
Break Up Sequence of Sweep-in FDs
As per the T&C of the sweep-in FDs in HDFC Bank, it is mentioned explicitly that "In case of more than one deposit linked for Sweep-In, the system will first Sweep-In funds from the last or recently opened deposit, i.e., on a LIFO(Last-In-First-Out) basis"
My Experience
While applying for these IPOs, when the lien was applied, I did not get any SMS/email that the sweep-in FD has been broken because of a lien. But when the actual amount (as per the partial allotment of the shares/bids) was debited, then of course I was intimated regarding the break-up of one or more given sweep-in FDs.
So, as I see it, the sweep-in FD remains intact even after any lien and keeps on getting applicable FD interest till such time it is actually broken.
Hope this helps. 🙂
Yes.
The principle used in both the processes (i.e. IPO application via ASBA through bank or UPI process through broker + UPI app) is the same - as the abbreviation ASBA suggests (Application Supported by Blocked Amount) - the amount is only blocked but not debited and hence continues to garner interest as applicable, till the requisite amount is actually debited. This is the intention of introduction of ASBA by SEBI in 2008.
When one applies for IPO through a broker app (say Zerodha Kite), then the process is as per UPI Mandate and autopay through the UPI app (like Phone Pe, etc).
I have used this process i.e. UPI Mandate process through Zerodha Kite app for IPOs and I find it very easy and the whole process including UPI autopay mandate is completed in a few minutes with a few clicks. I have never used the ASBA process through my bank.
For further reading on ASBA, see here.
For UPI process, see here.
For difference in the two processes, see here, here and here.
Etc.
Hope this helps. 🙂
It's indeed a nice explanation.
But the question am asking is...(part of it)You already answered in 443.
It's about - if we use UPI in that case the Sweep FD system functioning or through NetBanking ASBA ONLY...
Lets take my example -
1- once UPI goes live, I apply through it.
2-Earlier through ASBA - NetBanking
(But both in simple saving account.)
Either clear balance available or deposit cash/fund transfers before initiating IPO.
