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.