Banks to Use DoT’s Fraud Risk Indicator to Fight Cyber Scams in Real Time

Launched in May 2025, the Financial Fraud Risk Indicator (FRI) is a risk-based classification system developed by DoT’s Digital Intelligence Unit.

In a transformative move for India's digital financial security framework, the Department of Telecommunications (DoT) has welcomed the Reserve Bank of India’s (RBI) advisory dated June 30, 2025, which directs all Scheduled Commercial Banks, Small Finance Banks, Payments Banks, and Co-operative Banks to integrate the Financial Fraud Risk Indicator (FRI) into their internal systems. Developed by the Digital Intelligence Unit (DIU) of the DoT, the FRI represents a cutting-edge, collaborative initiative to combat the surging threat of cyber-enabled financial frauds in India’s rapidly expanding digital economy.

The move marks a watershed moment in inter-agency cooperation, combining the strengths of the telecom and financial sectors to build a technology-led, risk-mitigated, real-time defense mechanism for citizens and institutions alike.

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What is the Financial Fraud Risk Indicator (FRI)?

Launched in May 2025, the Financial Fraud Risk Indicator (FRI) is a risk-based classification system developed by DoT’s Digital Intelligence Unit. It assesses and categorizes mobile numbers based on their likelihood of being involved in financial fraud. Each number is tagged with a risk level—Medium, High, or Very High, depending on inputs from various national sources, including:

• National Cybercrime Reporting Portal (NCRP) under the Indian Cyber Crime Coordination Centre (I4C)

• Chakshu Platform—DoT’s citizen-centric fraud reporting portal

• Intelligence inputs from banks, NBFCs, UPI platforms, and telecom operators

• Mobile Number Revocation Lists (MNRL), containing details of numbers disconnected due to criminal or suspicious activity

The FRI serves as a dynamic fraud detection and prevention tool, enabling real-time monitoring and rapid decision-making.

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How FRI Strengthens Cyber Fraud Prevention for Banks

Integration of FRI into banking and financial systems means institutions can now proactively screen mobile numbers associated with user accounts or transactions and take real-time action. Key capabilities include:

• Flagging Suspicious Numbers: Transactions involving high-risk mobile numbers can be immediately declined, delayed, or subjected to further verification.

• Customer Alerts: Banks can warn users if they are interacting with potentially fraudulent mobile numbers.

• Adaptive Risk Management: Institutions can tailor KYC, transaction limits, and security protocols based on FRI tags.

• Minimizing Fraud Losses: By intervening early in the transaction chain, institutions can significantly reduce financial damage and reputational risk.

Institutions like HDFC Bank, ICICI Bank, Punjab National Bank, PhonePe, Paytm, and India Post Payments Bank are already leveraging FRI for improved fraud control, with promising results in transaction security and fraud deterrence.

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Real-Time API-Based Integration: The Next-Gen Defense Mechanism

The FRI system operates through API-based integration, ensuring seamless, automated data exchange between banks and DoT’s Digital Intelligence Platform (DIP). This allows:

• Instant Access to Risk Data

• Real-Time Fraud Detection

• Continuous Model Improvement through reciprocal feedback from institutions

• Reduced Manual Workload for fraud detection teams

This mechanism strengthens the telecom-fintech interface, ensuring that risk assessment happens at the speed of the digital economy.

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Why This Matters: Building a Safer Digital India

With Unified Payments Interface (UPI) accounting for the majority of India’s digital transactions, the threat of cyber fraud has risen sharply. According to recent data from RBI and CERT-In, fraudsters are increasingly exploiting mobile-based platforms to perpetrate phishing, SIM swapping, and identity theft scams.

FRI provides a shared national intelligence system, empowering banks and payment platforms to act preemptively rather than reactively. By integrating telecom data with banking workflows, it bridges the gap between digital identity and financial behavior—a critical step in building public trust.

“The Financial Fraud Risk Indicator is not just a tool—it is a national strategy for digital trust,” a DoT official stated.

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DoT and RBI: A Blueprint for Cross-Sector Resilience

The RBI’s advisory formally institutionalizes FRI usage across all regulated entities, cementing its role as a sector-wide standard. It also underscores the importance of collaborative cybersecurity governance, with DoT and RBI working closely to:

• Streamline alert mechanisms

• Automate fraud detection workflows

• Ensure proactive risk-based decision-making

• Foster public-private data cooperation

This model of telecom-finance convergence could serve as a blueprint for other sectors, from insurance to e-commerce.

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What Lies Ahead: Scaling, Evolution, and Empowerment

Looking forward, DoT plans to:

• Expand the FRI model to cover IMEI-based device risk scoring

• Enhance fraud prediction accuracy using AI and machine learning

• Build user-facing dashboards for greater citizen empowerment

• Collaborate with enforcement agencies for coordinated crackdowns

As more banks, NBFCs, and digital platforms onboard the FRI system, India’s digital economy is set to become more secure, resilient, and citizen-centric.

Securing Digital Bharat—One Mobile Number at a Time

The integration of the Financial Fraud Risk Indicator into India’s banking system marks a milestone in cyber-fraud prevention, establishing a real-time, risk-informed defense layer for millions of users. It demonstrates the power of inter-agency cooperation and sets the stage for future innovations in fraud intelligence, ensuring that as India leads in digital payments, it also leads in digital safety.