In a major development to bolster cyber fraud prevention and secure India’s rapidly expanding digital payment ecosystem, the Department of Telecommunications (DoT) has introduced the Financial Fraud Risk Indicator (FRI). Announced on May 22, 2025, this innovative analytical tool is designed to provide real-time risk assessments of mobile numbers used in digital transactions, helping financial service providers identify potential fraud before it happens.

What is the Financial Fraud Risk Indicator (FRI)?

The FRI is part of the Digital Intelligence Platform (DIP) developed by the DoT’s Digital Intelligence Unit (DIU). It functions as an early warning system by evaluating mobile numbers associated with digital financial transactions. Using data inputs from multiple sources—including the National Cybercrime Reporting Portal (NCRP), DoT’s internal Chakshu system, and intelligence reports from banks and financial institutions—the FRI assigns each mobile number a risk score categorized as:

• Medium Risk

• High Risk

• Very High Risk

These risk levels help payment platforms and financial institutions make informed decisions, such as flagging suspicious transactions or blocking payments entirely.

Complementary Mobile Number Revocation List (MNRL)

In addition to FRI, the DoT maintains a Mobile Number Revocation List (MNRL), which highlights mobile numbers that have been disconnected or revoked. Reasons for disconnection include:

• Engagement in cybercrime activities

• Failure to complete mandatory re-verification processes

• Breach of regulatory compliance

Since fraudsters often use temporary mobile numbers with very short life spans, tracking revoked numbers is crucial to stopping repeat fraud attempts.

Integration with Major UPI Platforms

The integration of FRI is already underway among India’s leading Unified Payments Interface (UPI) service providers, who together manage over 90% of UPI transactions:

• PhonePe has embedded FRI within its PhonePe Protect feature, which automatically blocks transactions involving Very High-risk numbers and alerts users when transactions involve Medium-risk numbers.

• Other platforms like Paytm and Google Pay are also incorporating FRI data, applying transaction delays or requiring additional user confirmations for flagged payments.

These proactive measures enable timely intervention and significantly reduce the likelihood of financial loss due to fraud.

Strengthening India’s Digital Financial Ecosystem

The launch of FRI signals a strong government commitment to safeguarding India’s digital payments landscape, which continues to grow at a rapid pace. With increasing transaction volumes and the proliferation of mobile devices, fraud detection and prevention mechanisms must evolve to stay ahead of cybercriminal tactics.

By making FRI a national standard for risk assessment, the DoT is fostering a collaborative ecosystem where regulators, financial institutions, and technology providers work together to:

• Enhance fraud detection accuracy

• Reduce financial crime impact

• Promote user confidence in digital payment systems

Collaborative Efforts and Future Enhancements

The DoT continues to collaborate closely with key stakeholders, including banks, NBFCs, and UPI service providers, to refine the FRI’s algorithms and expand its coverage. The platform’s dynamic nature allows it to adapt quickly to emerging fraud patterns and incorporate new data sources as they become available.

Furthermore, DoT plans to extend FRI capabilities beyond UPI transactions, potentially covering other digital payment methods and financial services, thereby broadening its protective umbrella over India’s digital economy.

Conclusion

The introduction of the Financial Fraud Risk Indicator by the Department of Telecommunications is a crucial milestone in India’s fight against cyber fraud. By leveraging advanced data analytics and real-time monitoring, FRI empowers financial institutions and payment platforms to identify risky mobile numbers and prevent fraudulent transactions effectively.

As digital payments become ubiquitous in India’s financial landscape, tools like FRI will play a vital role in securing transactions, protecting users, and maintaining trust in the nation’s digital financial ecosystem. This initiative is expected to set a benchmark for fraud prevention standards in the country, fostering safer and more resilient digital commerce for all.

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