Birmingham spent big last summer as then-manager Harry Redknapp looked to turn the squad in to a force that could fight for promotion back to the Premier League.
As a result of the big expenditure last season, without a significant increase in the income of the 'Blues' they are facing a ban which means that they are currently unable to register any new players.
Manager Gary Monk is still thought to be pursuing new targets to improve his squad, but this ban means that he will not be able to act on any of those purcheases until the ban has been lifted.
The punishment from the championship also puts in to doubt the status of Kristian Anderson, who was brought in to the club from German outfit Union Berlin in June.
'Sky Sports' believes that the club are confident they can turn the situation round before the end of the transfer window.