In a major stride toward strengthening India’s cybersecurity infrastructure, the Reserve Bank of India (RBI) has issued an advisory instructing all Scheduled Commercial Banks, Small Finance Banks, Payment Banks, and Co-operative Banks to adopt the Financial Fraud Risk Indicator (FRI) developed by the Department of Telecommunications (DoT). The decision, formalized on June 30, 2025, reflects an urgent response to the growing volume and sophistication of cyber-enabled financial crimes in the country.
The FRI, launched in May 2025 by DoT’s Digital Intelligence Unit (DIU), serves as a risk-based classification systemthat rates mobile numbers as Medium, High, or Very High risk based on potential fraud associations. These ratings are based on inputs from national cybercrime portals, DoT’s own Chakshu platform, and intelligence from banks and financial institutions. By integrating telecom data into financial systems, this cross-sectoral initiative lays the groundwork for real-time fraud detection and mitigation.
DoT described this as a “watershed moment”, enabling a level of inter-agency coordination never before seen in India’s digital public infrastructure. With UPI transactions surging and digital payments becoming the norm, this AI-backed fraud risk framework could save millions from phishing, vishing, and social engineering attacks.
How FRI Works: Real-Time Risk, Real-Time Response
At its core, the Financial Fraud Risk Indicator empowers banks and fintech platforms with real-time intelligence about mobile numbers flagged for suspicious activity. For example, if a customer’s mobile number has a history of being reported for cyber fraud or appears on DoT’s Mobile Number Revocation List (MNRL), banks can instantly decline a transaction, delay execution, or alert the customer and authorities.
This classification is not arbitrary. It is generated from inputs across key digital enforcement systems including:
- Indian Cyber Crime Coordination Centre (I4C)’s NCRP portal.
- Chakshu, DoT’s crowdsourced fraud reporting tool.
- Inputs from financial institutions and payment service providers.
Importantly, leading platforms like HDFC Bank, ICICI Bank, PhonePe, Paytm, and India Post Payments Bank are already utilizing the FRI system. The advisory by RBI now formalizes and scales this practice across the banking sector, pushing all regulated entities to implement API-based integration with DoT’s Digital Intelligence Platform (DIP).
This architecture ensures automated, bidirectional communication, allowing for dynamic fraud risk scoring and continuous updates—essential in tackling rapidly evolving fraud techniques such as account takeover, SIM swap fraud, and mule accounts.
A New Era of Digital Trust and Cyber Resilience
The decision by RBI and DoT is more than just a policy tweak—it is a strategic shift toward embedding fraud prevention into the architecture of India’s digital economy. The real-time nature of FRI, its pan-industry integration potential, and its data-driven intelligence signal the rise of a new cyber hygiene standard.
With nearly 900 million mobile connections and over 400 million UPI users, the risk surface for fraud is immense. The FRI system aims to bring telecom intelligence directly into banking workflows, reinforcing trust at every transaction touchpoint. It also strengthens India’s position as a global leader in secure digital payments, building on the success of Aadhaar, UPI, and DigiLocker.
This initiative aligns seamlessly with the Government of India’s Digital India vision, focusing on technology-driven governance, real-time fraud mitigation, and citizen protection. As more financial entities adopt FRI, it is expected to evolve into a sector-wide trust layer, not just in banking but also in insurance, NBFCs, and fintech ecosystems.