New IBC Moots ₹2-Crore Fine, Nixing License for Errant RPs

Lenders are seeking to replace RPs in high-profile insolvency cases such as Byju's and Hindustan National Glass

- Priyanka Gawande & Krishna Yadav

With a view to increase their accountability, resolution professionals (RPs) could be in for stricter action under the proposed Insolvency and Bankruptcy Code (Amendment) Bill, 2025, which will empower the "disciplinary committee" to impose penalties of up to ₹2 crore, suspend, or even cancel their registrations for "unlawful gains".

The draft law lands at a time when lenders have been moving to replace RPs in high-profile insolvency cases.

If the proposals are approved, what will change from the current norms are the penalties—with the maximum being doubled from ₹1 crore—and more teeth to the "disciplinary committee", the Insolvency and Bankruptcy Board of India (IBBI), that can act faster with show cause notices.

The RPs will be classified as "service providers", putting them clearly under IBBI's regulatory net.