Banks advised to adopt fraud risk indicator

Hindustan Times

03-07-2025

All banks have been advised to prevent cyber frauds by employing the Department of Telecommunications (DoT) real-time, risk-based metric — Financial Fraud Risk Indicator (FRI) — which would help them in declining suspicious transactions, issuing alerts or warnings to customers, and delaying transactions flagged as high risk, a finance ministry official said. Banks advised to adopt fraud risk indicator
The Reserve Bank of India (RBI) has already issued an advisory last month to this effect, directing all scheduled commercial banks, payments banks and co-operative banks to integrate FRI developed by DoT into their systems, the official, who did not wish to be named, said.
In a statement issued on Wednesday, the ministry of communications welcomed RBI's directive. 'This is a watershed moment in the fight against cyber-enabled financial frauds and a testament to the power of inter-agency collaboration in safeguarding citizens in India's growing digital economy,' it said. The DoT is an arm of the ministry.
The system is of strategic importance of automating data exchange between banks and DoT's digital intelligence platform DIP through API-based integration, enabling real-time responsiveness and continuous feedback to further refine the fraud risk models, it said.
'The system's utility has already been demonstrated with leading institutions such as PhonePe, Punjab National Bank, HDFC Bank, ICICI Bank, Paytm, and India Post Payments Bank actively using the platform,' the statement said.
With UPI being the most preferred payment method across India, this intervention could save millions of citizens from falling prey to cyber fraud, it said. The FRI allows for swift, targeted, and collaborative action against suspected frauds in both telecom and financial domains.
FRI, launched in May 2025 by the Digital Intelligence Unit (DIU) of DoT, is a risk-based metric that classifies a mobile number to have been associated with medium, high, or very high risk of financial fraud. This classification is an outcome of inputs obtained from various stakeholders including reporting on Indian Cyber Crime Coordination Centre's (I4C) National Cybercrime Reporting Portal (NCRP), DoT's Chakshu platform, and intelligence shared by banks and financial institutions, it said.
'It empowers stakeholders-especially banks, non-banking finance companies (NBFCs), and unified payment interface (UPI) service providers- to prioritise enforcement and take additional customer protection measures in case a mobile number has high risk,' it said. The Digital Intelligence Unit regularly shares the Mobile Number Revocation List (MNRL) with stakeholders, detailing numbers disconnected due to cybercrime links, failed re-verification, or misuse—many of which are tied to financial frauds, it added.
This move marks a new era of digital trust and security, reinforcing the government's broader 'Digital India' vision, it said. As more institutions adopt FRI into their customer-facing systems, it is expected to evolve into a sector-wide standard, reinforcing trust, enabling real-time decision-making, and delivering greater systemic resilience across India's digital financial architecture, it said.