CDSL unavalibility

In the worst case scenario, if CDSL is not available, what happens ?

https://www.business-standard.com/article/companies/malware-attack-settlement-activities-affected-at-india-s-depository-cdsl-122111801057_1.htm

Adding more directed question

  1. Can Markets function ?
  2. Is there a way to back up a certified copy of all the holdings ? to say in the DigiLocker

For the intermittent issue since yesterday, here are some of the issues we face,

Depositories are an integral and critical part of market infrastructure, and are vital to the functioning of markets. Digilocker is not a depository and cannot be used to back up holdings. :slight_smile:

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Thanks for the response … i know DigiLocker cant function as Depositories … What i meant to say was … Say in a worst case scenario say CDSL is not available for an extended period of time what is the fallback option, can it switch to NDSL ? …

There is no way to switch seamlessly to NSDL. Every broker will have to get all customers to open NSDL accounts and then move securities, which is impossible if the CDSL systems are still down.

We have heard that given that this is a weekend, they are going an extra distance to ensure they set up a clean environment and ensure nothing continues to be affected. Hopefully, everything should be sorted by the end of the day today.

While exchanges can back each other for scrips that are trading on both exchanges due to interoperability, it is impossible to have such a setup with clearing corporations (where funds are kept), and depository (where stock is held) as both of them hold customer assets. To back up, there should be a way to move the asset itself, which isn’t possible if the systems are down.

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@nithin … thanks that is kinda scary … that the depository is the single point of failure !! … just thinking of the nightmare scenario of a quite plausible ransomware attack on the depository will render markets in rough spot even if exchanges are up and running

I don’t think we can do anything by worrying about the worst possible scenario. Just as we embrace the convenience and comfort of technology, we should be ready for such a scenario too.

Perhaps take solace in knowing that, we are not alone in such a scenario and that lacs of other investors share the same emotion, if it happens :face_in_clouds:

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Is there any possible holdings can be compromised. I am assuming there would be hard backup from time to time. but that may not be latest. I basically mean to ask can our holdings be stolen from cdsl?

did some more digging
i am really surprised at the nonchalant report they filled doesnt have too much details

since CDSL is a listed entity i think they should do better reporting and even more worrying is the fact that www.cdslindia.com is down too :frowning:

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I guess yes, technically possible I mean. When something is stored as code, it can be erased, unless, of course there are multiple copies, stored in different places, which the perpetrators don’t know of.

Thinking out loud :grin:

If such a scenario of data loss happens, I guess the consequences and repercussions will be far worse than we can possibly imagine, and I also guess the systems are robust enough to not get hit in their entirety.

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@nithin Does zerodha have any long term plans to switch to NSDL after this incident?

@bhuvan I recently applied for 7.54% 2036 Government securities in the RBI auction via coin. Its interest payment due date is 23rd November (wednesday). Normally g-secs are credited to demat on Monday. will there be any delay in credit of gsec due to CDSL issue?? It concerns me because if g-secs are not in my demat by wednesday, I may not receive the interest on 23rd November. Almost 3.77% interest has been paid at the time of allotment as component of dirty price.

I just dont think the issue is with CDSL only. I am with NSDL and the TM has not updated the ledger for 18th Nov.

May be NSDL would have taken some precautionary steps and hence the delay - i am not sure !

Holdings can’t really be stolen like in Crypto. If somehow shit hit the fan and the accounts got compromised, stocks can be only moved from one CDSL to another CDSL/NSDL account. So the stocks will remain in the depository ecosystem itself and in their control, they can’t be moved to say an account in the Bahamas. :slight_smile:

Yeah, there will be external hard disks not connected to the systems that act as a backup as well. I guess CDSL will soon share an RCA (Root cause analysis) and all the backups in place after this incident.

Not as of now. This could have happened to anyone, so no guarantee that tomorrow it can’t happen to NSDL. But after this incident, I am sure everyone will be extra cautious.

I don’t think anything will change and you should get all credits as scheduled. We got lucky that this incident happened on Friday. All settlements are happening today (Sunday) as if it was a Friday.

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CDSL systems are up, and we have started the settlement processes. This is the plan as shared by the clearing corporations.

image

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Thanks for all the effort Nithin and team. And thanks for reassuring messages.

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it would be interesting to know how the backups are done and more importantly how the backup are reconciled when the need to restore from are needed … (re-watched an old movie Swordfish :slight_smile: )

more interesting will be if records are changed in CDSL :smirk: