ASBA - Old Wine in New Bottle?

ASBA stands for Applications Supported by Blocked Amount.  I have been seeing hoardings on roadside advertising for IPOs of certain companies of late containing this acronym.  It is also found prominently in the News Paper ads for IPOs.  They read "ASBA is a better way of applying to issues by simply blocking the fund in the bank account, investors can avail the same.  For details, check section on ASBA below".

The ads further say that "Investors may apply through the ASBA process.  ASBA can be availed by all the investors other than Qualified Institutional Buyers (QIBs).  The investor is required to fill the ASBA form and undertake other tasks as the specified procedure.  On allotment, amount will be unblocked and account will be debited only to the extent required to pay for allotment of shares.  Hence, there will be no need of refunds etc.  ASBA form can be obtained from several banks, the list of such banks is given in the ASBA form and is available on website of SEBI at http://www.sebi.gov.in/   For more details on the ASBA process, please refer to the detail given in the ASBA form and Abridged Prospectus and also please refer to the section 'Offer Procedure - Offer Procedure for ASBA Bidders' beginning on page... of the Red Herring Prospectus".

I am very sure SEBI must have taken adequate precautions while introducing the new ASBA procedure.  In fact, about two decades back there was a mechanism called Stock Invest - a paper issued by the banker of the investor to attach to the Share Application form with similar facilities like ASBA.  There were large scale misuse of the facility by scamsters in the Stock Market.  Hence, I termed it as Old Wine in New Bottle.  Every time the regulators like SEBI take a new initiative looking into the interests of investors, some perveted characters find loope holes and defeat the system.  In early nineties, Harshad Mehta invented an instrument called Banker's Receipt and played with almost all types of banks (public, private, cooperative and foreign banks), all levels of Officials by fooling them and made huge killing on scrips which are even junk papers.