RBI asks banks to integrate ‘Financial Fraud Risk Indicator’ to curb cyber frauds

The Reserve Bank of India (RBI) has advised all scheduled commercial banks, small finance banks, payments banks, and co-operative banks to integrate the Financial Fraud Risk Indicator (FRI) developed by the Department of Telecommunications (DoT) into their systems to boost defences against cyber-enabled financial frauds, the ministry of communications said on Wednesday.

In an advisory issued on June 30, RBI stressed the need for real-time integration of the FRI with banking workflows to enable proactive fraud prevention measures.

The Financial Fraud Risk Indicator, launched in May 2025 by DoT’s Digital Intelligence Unit, classifies mobile numbers based on their risk of being involved in financial frauds.

The FRI system labels mobile numbers as having a Medium, High, or Very High risk of being linked to financial scams.

It gathers data from multiple sources, including the Indian Cybercrime Coordination Centre’s National Cybercrime Reporting Portal, DoT’s Chakshu platform, and reports from banks and financial institutions.

According to DoT, banks can use the FRI in real time to decline suspicious transactions, issue alerts or warnings to customers, and delay transactions flagged as high risk.

The system has already been adopted by institutions such as PhonePe, Punjab National Bank, HDFC Bank, ICICI Bank, Paytm, and India Post Payments Bank.

“This is a watershed moment in the fight against cyber-enabled financial frauds,” DoT said in a statement, adding that the API-based integration would automate data exchange between banks and DoT’s Digital Intelligence Platform, enabling continuous feedback to further refine fraud risk models.

The Digital Intelligence Unit also shares the Mobile Number Revocation List (MNRL) with stakeholders, detailing numbers disconnected due to cybercrime links, failed re-verification, or misuse.

The integration is expected to save millions of citizens from falling prey to cyber frauds, especially in the context of the growing adoption of UPI as a payment method.

DoT stated that the FRI will evolve into a sector-wide standard, reinforcing trust, enabling real-time decision-making, and enhancing systemic resilience across India’s digital financial ecosystem.