How is RBI Guiding Banks to Implement DoT’s Financial Fraud Risk Indicator to Combat Cyber Fraud?

New Delhi, July 2 (NationPress) The Department of Telecommunications (DoT) views the RBI's recommendation for banks to incorporate the Financial Fraud Risk Indicator (FRI), developed by them, as a pivotal moment in the battle against cyber-enabled financial frauds.

The advisory issued by the RBI on June 30 to all scheduled commercial banks, small finance banks, payments banks, and co-operative banks highlights the effectiveness of inter-agency cooperation in protecting citizens in India’s expanding digital economy, as stated by the DoT on Wednesday.

It emphasizes the crucial role of automating data interchange between banks and the DoT's Digital Intelligence Platform (DIP) via API-based integration, facilitating real-time responsiveness and ongoing feedback to enhance fraud risk models, according to the statement.

The Financial Fraud Risk Indicator (FRI), introduced in May 2025 by DoT’s Digital Intelligence Unit (DIU), serves as a risk-based metric that categorizes a mobile number according to its association with medium, high, or very high risk of financial fraud. This categorization is derived from inputs gathered from various stakeholders, including reports from the Indian Cyber Crime Coordination Centre’s (I4C) National Cybercrime Reporting Portal (NCRP), the DoT’s Chakshu platform, and intelligence shared by banks and financial institutions.

The FRI empowers stakeholders, particularly banks, non-banking financial companies (NBFCs), and UPI service providers, to prioritize enforcement and implement additional customer protection measures when a mobile number is identified as high risk. The Digital Intelligence Unit (DIU) of the DoT regularly disseminates the Mobile Number Revocation List (MNRL) to stakeholders, which includes numbers that have been disconnected due to cybercrime affiliations, failed re-verification, or misuse, many of which are linked to financial fraud.

Banks and financial institutions can utilize the FRI in real time to undertake preventive actions such as rejecting suspicious transactions, sending alerts or warnings to customers, and postponing transactions flagged as high risk.

This system's effectiveness has been validated with major institutions like PhonePe, Punjab National Bank, HDFC Bank, ICICI Bank, Paytm, and India Post Payments Bank actively employing the platform. Given that UPI is the most favored payment method in India, this initiative could protect millions of citizens from becoming victims of cyber fraud. The FRI enables swift, focused, and collaborative responses to suspected fraud in both the telecommunications and financial sectors, according to the DoT statement.

The DoT reiterated its commitment to aiding banks and financial institutions in their endeavors to combat cyber-enabled fraud by implementing technology-driven, nationally coordinated solutions like the Financial Fraud Risk Indicator. This initiative heralds a new era of digital trust and security, reinforcing the Government’s broader Digital India initiative.

Furthermore, the DoT continues to collaborate closely with RBI-regulated entities to enhance alert mechanisms, expedite fraud detection, and integrate telecommunications intelligence directly into banking operations. As more institutions incorporate FRI into their customer-facing systems, it is anticipated to become a sector-wide standard, enhancing trust, enabling real-time decision-making, and delivering greater systemic resilience across India’s digital financial framework.