CDSL share price traded lower on Tuesday, after the markets regulator Sebi imposed a penalty of ₹1 crore on the company for cybersecurity lapses. CDSL shares fell as much as 0.94% to ₹1,372.10 apiece on the NSE.
The Sebi order against Central Depository Services (India) Ltd (CDSL) stems from a malware attack on November 18, 2022, which disrupted several critical systems at the company.
However, the regulator disposed of adjudication proceedings against the former Chief Information Security Officer Rajesh Nadkarni and former Chief Technology Officer Amit Mahajan without imposing any monetary penalty, holding that the alleged lapses could not be attributed to them individually.
SEBI has imposed a penalty of ₹90 lakh under the Sebi Act and ₹10 lakh under the Depositories Act on CDSL for failing to comply with various cybersecurity and cyber resilience requirements. The regulator directed CDSL to pay the penalty within 45 days.
In its 88-page order, Sebi said CDSL failed to classify its internet-facing Active Directory Federation Services (ADFS) server as a critical asset, excluded it from vulnerability assessment and penetration testing (VAPT), and did not implement basic cybersecurity controls despite regulatory requirements.
The regulator noted that it had flagged these deficiencies to CDSL in August 2022, but the depository did not address them and instead relied on an earlier, deficient VAPT exercise.
Sebi also observed that attackers had gained access to CDSL’s servers as early as November 2021, nearly a year before the malware attack was detected in November 2022.
According to the order, the malware attack infected 135 of 547 servers and 177 of 506 desktops and laptops, disrupting key depository operations, including settlement, pay-in/pay-out and pledge-related activities, on November 18, 2022.
Meanwhile, CSDL said there was no material impact on financials, operation or other activities of the company, except the payment of the proposed penalty amount.
CDSL Share Price Performance
CDSL share price has risen 1% in three months, but has fallen 5% on a year-to-date (YTD) basis. The stock has declined over 20% in one year, but has delivered multibagger returns of 132% over the past three years.
At 10:30 AM, CSDL share price was trading 0.61% lower at ₹1,376.70 apiece on the NSE.
About The Author
