Section 208 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 208(2) provides that every insolvency professional shall abide by a code of conduct requiring reasonable care and diligence, compliance with the byelaws of the insolvency professional agency of which the professional is a member, allowing the IPA to inspect records, submitting records of every proceeding before the Adjudicating Authority to the Board and the IPA, and performing functions as specified.
The five statutory obligations
| # | Obligation |
|---|---|
| 1 | To take reasonable care and diligence while performing his duties |
| 2 | To comply with all requirements and terms and conditions specified in the byelaws of the IPA of which he is a member |
| 3 | To allow the IPA to inspect his records |
| 4 | To submit a copy of the records of every proceeding before the Adjudicating Authority to the Board as well as to the IPA of which he is a member |
| 5 | To perform his functions in such manner and subject to such conditions as may be specified |
How section 208 relates to the regulatory code of conduct
Section 208(2) is the statutory code of conduct — five broad obligations in the Code itself.
The First Schedule to the IBBI (Insolvency Professionals) Regulations, 2016, under Regulation 7(2)(h), contains the detailed code of conduct organised under nine heads: integrity and objectivity; independence and impartiality; professional competence; timeliness; information management; confidentiality; occupation, employability and restrictions; remuneration and costs; and gifts and hospitality.
A professional is bound by both. The statutory obligations in section 208 are not a summary of the regulatory ones — obligations 3 and 4, on inspection and record submission, have no direct counterpart in the nine heads.
Obligations 3 and 4 — the supervision mechanism
These two are what make the profession supervisable:
- Allowing IPA inspection of records gives the intermediary a right of access that does not depend on a complaint.
- Submitting records of every proceeding before the Adjudicating Authority to both the Board and the IPA creates a continuous flow of information to the regulator and the agency, independent of what anyone alleges.
Note the breadth of obligation 4: every proceeding, to both recipients. It is an administrative discipline that has to be built into the assignment workflow, not performed at the end.
Reasonable care and diligence, and section 47
Obligation 1 — reasonable care and diligence — now has a specific statutory application. Under section 47 as amended in 2026, where an RP, IRP or liquidator fails to identify and file applications for transactions that could have been discovered with proper professional effort, any stakeholder may approach the Adjudicating Authority, which can recommend disciplinary action to IBBI.
"Proper professional effort" and "reasonable care and diligence" are the same standard expressed in different instruments, and the 2026 amendment gives it a defined consequence in a defined situation.
Contravention
Section 220(3) addresses contravention by an insolvency professional agency, insolvency professional or information utility of any provision of the Code or the rules or regulations made under it. The material records that the penalty imposed shall not exceed five crore rupees.
Professional misconduct — the wider exposure
A chartered accountant acting as an insolvency professional carries exposure under the professional framework as well:
- A member may be held guilty of misconduct where found guilty by any civil or criminal court for an offence punishable with imprisonment for a term not exceeding six months — which underscores that even minor legal infractions can lead to professional consequences.
- A member may be held guilty where, in the opinion of the Council, their actions bring disrepute to the profession or the Institute — a subjective test where the perception of a member's actions, whether or not directly related to their professional duties, can impact their standing.
The second is notably wide: it reaches conduct outside professional duties.
Building compliance into the assignment
- Maintain records in a form that can be inspected on request.
- File proceeding records with the Board and the IPA as each proceeding concludes, not in a year-end batch.
- Read the IPA byelaws — obligation 2 makes them binding, and they vary between agencies.
- Document care and diligence, particularly the forensic transaction review.
- Track specified conditions under obligation 5, which changes as regulations issue.
Compliance checklist
- Apply reasonable care and diligence, documented.
- Comply with the IPA byelaws of your own agency.
- Keep records inspection-ready.
- Submit records of every Adjudicating Authority proceeding to both the Board and the IPA.
- Read section 208 alongside the nine heads in the First Schedule.
- Note the five crore penalty ceiling under the contravention provisions.
Common mistakes
- Treating the regulatory code of conduct as the whole obligation.
- Submitting proceeding records to the Board only.
- Batching record submissions instead of filing as proceedings conclude.
- Not reading the IPA byelaws.