Financial Fraud Risk Indicator (FRI)

- 23 May 2025
In News:
The Department of Telecommunications (DoT), under the Ministry of Communications, has launched the Financial Fraud Risk Indicator (FRI) to counter the growing menace of cyber-enabled financial frauds, especially those involving mobile numbers.
What is FRI?
The Financial Fraud Risk Indicator (FRI) is a multi-dimensional analytical tool developed under the Digital Intelligence Platform (DIP). It classifies mobile numbers based on their risk level—Medium, High, or Very High—of being associated with financial fraud.
Purpose:
- To provide advance risk intelligence to financial institutions.
- To serve as a pre-transaction validation tool, flagging suspicious mobile numbers involved in digital transactions.
How It Works:
- The classification is based on data inputs from:
- National Cybercrime Reporting Portal (NCRP)
- DoT’s Chakshu facility
- Intelligence from banks and NBFCs
- Risk-tagged mobile numbers are flagged in real-time to stakeholders, including banks, UPI platforms, and payment service providers.
- Acts as a cyber shield, preventing fraudulent digital payments before they occur.
Implementation and Use Cases:
- PhonePe, an early adopter, uses FRI to:
- Block transactions involving "Very High" risk numbers.
- Warn users during transactions with "Medium" risk numbers via its "PhonePe Protect" feature.
- Other UPI giants like Google Pay and Paytm (collectively handling 90% of UPI traffic) are integrating FRI-based alerts.
- Banks have begun introducing transaction delays and alerts to curb cyber fraud using FRI data.
Why FRI is Crucial:
- India lost over ?3,207 crore to approximately 5.82 lakh cyber fraud cases between FY 2020–2024.
- The short operational window of fraudulent mobile numbers makes advance detection vital.
- Common cyber frauds include:KYC scams, UPI frauds, investment scams, digital arrest frauds, and get-rich-quick schemes.
Supporting Mechanisms:
- Digital Intelligence Platform (DIP): Facilitates real-time intelligence sharing between law enforcement and financial institutions.
- Chakshu on Sanchar Saathi: Enables citizens to report suspicious communication.
- Citizen Financial Cyber Fraud Reporting System: Part of I4C, it allows real-time fraud reporting via the 1930 helpline or cybercrime.gov.in.
- E-Zero FIR: Automatically registers FIRs for cybercrime complaints involving more than ?10 lakh.
- Mulehunter (RBI): AI-based tool to identify and track money mule accounts.