Neutral NewsSEBI Penalizes CDSL for Cybersecurity Lapses Following 2022 Malware Breach
The Securities and Exchange Board of India (SEBI) fined Central Depository Services (CDSL) ₹1 crore on July 21, 2026, for cybersecurity failures linked to a November 2022 malware attack.
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The Securities and Exchange Board of India (SEBI) fined Central Depository Services (CDSL) ₹1 crore on July 21, 2026, for cybersecurity failures linked to a November 2022 malware attack. The breach, which originated from unauthorized access in November 2021, caused a 46-hour settlement disruption and a 54.5-hour delay in inter-depository transfers. SEBI cited long-standing lapses, including weak password policies and ignored login thresholds, as primary causes for the incident. The regulator emphasized that these vulnerabilities created significant risks for the broader securities market.
Context
The Securities and Exchange Board of India (SEBI) regulates the Indian securities market, including depositories like Central Depository Services (CDSL). This penalty follows a multi-year investigation into a 2022 malware incident that disrupted core financial settlement processes.
Supportive perspectives
The regulator determined that the malware attack was a foreseeable consequence of CDSL failing to adhere to established cybersecurity directions.
SEBI highlighted that the interconnected nature of financial depositories necessitates strict adherence to security protocols to prevent systemic risks.
The investigation revealed that CDSL ignored critical security measures, such as lockout thresholds for failed login attempts, until the attack occurred.
Critical perspectives
The breach exposed significant vulnerabilities, as attackers maintained unauthorized access to CDSL servers for a full year between November 2021 and November 2022.
CDSL administrative practices, specifically creating an account with a password that never expires, directly facilitated the unauthorized access.
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