Answer
No, you generally cannot use the money in a sweep-in/out savings account to apply for an IPO. The amount required for the IPO must be readily available as clear funds in your linked savings or current account.
- ASBA Rule: The ASBA (Applications Supported by Blocked Amount) process needs the full IPO application amount to be a “clear available balance” in your bank account.
- Sweep-in/out Problem: When funds automatically move (sweep-out) into a Fixed Deposit (FD), the bank’s system cannot ‘block’ that money for the IPO application. This leads to your application being rejected.
What you should do:
You must ensure that the IPO amount is present as a clear balance in your account and is not part of the sweep-in/out facility. You need enough clear funds to allow the bank to block the amount.