Birmingham indicated on Friday the Football League have placed them under a transfer embargo for failing to submit their club accounts on time, the second tier outfit missing a March 1 deadline.
The embargo means the club cannot make any signings until further notice.
A Birmingham statement read: "Birmingham City Football Club can confirm that it has been made subject to a transfer embargo by the Football League. This is due to not hitting a 1 March 2012 deadline for submission of the company's June 2011 financial statements to the League.
The club blamed the problem on delayed audit processes as well as "financial issues thrown at the club due to the arrest and freezing of the assets of the club's main benefactor and changes to banking arrangements.
"The draft financial statements are prepared and it is understood that these will be finalised and published by the end of April," Birmingham said, adding they were satisfied with their player squad strength having Thursday signed three players - Peter Ramage arriving on loan from QPR while Caleb Folan and Cian Hughton joined as free agents.
Fellow Championship side Coventry earlier likewise had an embargo imposed on them.