Insolvency Regulator Suspends Professional For Drawing Unauthorized Monthly Fee

The Insolvency and Bankruptcy Board of India (IBBI) has suspended a resolution professional for a duration of one year following the unauthorized withdrawal of a monthly fee amounting to 5 lakh rupees. The regulatory authority determined that the professional failed to obtain prior approval from the Committee of Creditors (CoC) before drawing the remuneration. This conduct breached Regulation 34B(2) along with established professional conduct requirements.

Under the insolvency framework, remuneration for resolution professionals requires strict adherence to regulatory norms and explicit committee sanction to maintain financial transparency during corporate rescue processes. Drawing fees without statutory backing or stakeholder consent undermines the integrity of the resolution mechanism. Previously, practitioners had more leeway, but current regulations enforce strict oversight on all outlays and fee structures.

Insolvency professionals must ensure all fee claims and withdrawals secure prior committee endorsement before execution. Practitioners should audit their active assignments to verify compliance with fee regulations and professional standards. Bottom line: Strict regulatory enforcement means unauthorized withdrawals carry severe professional suspension risks.