mumbai/new delhi, Sept. 8 -- With a view to increase their accountability, resolution professionals (RPs) could be in for far stricter action under the proposed Insolvency and Bankruptcy Code (Amendment) Bill, 2025, which will empower the "disciplinary committee" to impose penalties of up to Rs.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 many 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 Rs.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 the IBBI's regulatory net. Corporate debtors will also no longer be able to nominate their resolution professional when filing a section 10 application, which allows firms to voluntarily initiate corporate insolvency resolution process. Instead, the National Company Law Tribunal (NCLT) will refer names to the IBBI in a bid to lower the risk of biased appointments. Even now, the IBBI can take action against an RP, also called the insolvency professional/agency on complaints. This action includes suspension or cancellation of registration or the imposition of penalties, with the present maximum monetary penalty capped at Rs.1 crore. The lenders of an insolvent company can replace the RP with a 66% vote. Currently, the NCLT appoints the resolution professional on the company's recommendation only if no disciplinary action is pending against them. But in cases where the creditors do not favour the professional, the court refers it to the IBBI for recommendation. In the current context, lenders are seeking to replace RPs in high-profile insolvency cases such as Byju's and Hindustan National Glass, reflecting the growing unease over their conduct. By tightening oversight of the individuals who manage bankrupt firms and oversee creditor recoveries, the amendment seeks restore confidence in India's nine-year-old insolvency regime. "The disciplinary committee, after giving the service provider an opportunity of being heard, is satisfied that sufficient cause exists, it may impose a penalty as or suspend or cancel the registration of the service provider. Where any service provider has contravened any provisions of this Code or rules or regulations made thereunder, the disciplinary committee may impose penalty which shall be two crore rupees," said the proposed amendment that was rolled out in August. The service provider here refers to a resolution professional. While managing a company undergoing the bankruptcy process an RP has to take account of the assets, overlook daily operations, and come up with a resolution plan to repay creditors. The proposed changes come at a time when lenders in several corporate insolvency cases are seeking to replace existing RPs, citing dissatisfaction with their conduct and lack of confidence in the resolution process. The IBC Amendment Bill was introduced by the government in the Lok Sabha on 12 August. It has since been referred to a select committee for scrutiny. In various insolvency cases, creditors have proposed to replace the RPs midway during the insolvency proceedings before the NCLT....