RBI Mandates Banks to Adopt DoT’s Financial Fraud Risk Indicator for Cybersecurity

In a decisive move to strengthen India’s defense against cyber-enabled financial fraud, the Reserve Bank of India (RBI) has directed all major financial institutions to integrate the Department of Telecommunications’ (DoT) newly developed Financial Fraud Risk Indicator (FRI). This initiative enables real-time threat detection by flagging high-risk mobile numbers, helping banks proactively prevent suspicious digital transactions.

Why in News?

On June 30, 2025, the RBI issued an advisory mandating the use of the FRI system across Scheduled Commercial Banks, Payments Banks, NBFCs, UPI service providers, and other financial institutions. The step follows the launch of the FRI by the DoT in May 2025 and is part of a larger national strategy to fight digital payment frauds amid the rapid expansion of India’s digital economy.

Objectives & Purpose of FRI

• To detect and mitigate cyber threats and financial frauds at the point of transaction.
• To create a collaborative intelligence-sharing ecosystem between telecom authorities and financial entities.
• To reduce response time and enable instant decision-making in blocking or flagging fraudulent activities.

How the FRI Works

FRI classifies mobile numbers into three risk categories,

• Medium
• High
• Very High

Risk classification is based on,

• Reports from National Cybercrime Reporting Portal (NCRP)
• Intelligence from DoT’s Chakshu platform
• Input from banks and financial institutions

Real-Time Action Enabled by FRI

Banks and fintech platforms can,

• Block or delay high-risk transactions
• Alert customers before processing questionable payments
• Verify identity before allowing sensitive actions
• Helps prevent UPI-based and mobile-linked financial frauds

Institutions Already Adopting FRI

• PhonePe, Paytm, ICICI Bank, PNB, HDFC Bank, and India Post Payments Bank
• More integrations underway across the financial ecosystem

Supporting Measures

• Mobile Number Revocation List (MNRL)
• Maintained by DoT
• Includes disconnected numbers associated with cybercrime
• Enhances the cyber hygiene of India’s digital financial ecosystem

Significance

• Supports Digital India and Financial Inclusion by safeguarding user trust
• Establishes inter-agency coordination between RBI, DoT, NCRP, and financial entities
• Provides a technological backbone to India’s evolving digital payment infrastructure