RBI Directs Banks To Integrate Fraud Risk Indicator In Fight Against Cybercrime

(MENAFN- KNN India) New Delhi, Jul 4 (KNN) The Reserve Bank of India has issued a directive requiring all Scheduled Commercial Banks, Small Finance Banks, Payments Banks, and Co-operative Banks to integrate the Financial Fraud Risk Indicator (FRI) into their operational systems.

This mandate represents a coordinated response to the escalating threat of cyber fraud in India's digital financial ecosystem.

The FRI system, developed by the Department of Telecommunications' Digital Intelligence Unit and launched in May 2025, assigns risk classifications of Medium, High, or Very High to mobile numbers based on their association with financial fraud activities.

The risk assessment incorporates data from multiple sources, including complaints filed through the National Cybercrime Reporting Portal under the Indian Cyber Crime Coordination Centre, reports from DoT's Chakshu platform, and intelligence shared by banking institutions and financial entities.

The integration facilitates automated API-based data exchange between banking institutions and the DoT's Digital Intelligence Platform, enabling real-time fraud detection and continuous refinement of risk assessment models.

Banks can utilise this intelligence to implement pre-emptive measures such as blocking or delaying suspicious transactions, issuing customer alerts for potential risks, or taking other precautionary actions when high-risk mobile numbers are identified.

The Digital Intelligence Unit also maintains a Mobile Number Revocation List, which catalogues numbers disconnected due to verified cybercrime involvement, failed KYC re-verification, or documented misuse.

This supplementary tool enhances the overall fraud prevention framework by providing additional context for risk assessment.

Several major financial institutions, including PhonePe, Punjab National Bank, HDFC Bank, ICICI Bank, Paytm, and India Post Payments Bank, have already implemented the FRI system to strengthen customer security protocols.

The widespread adoption of this technology across India's Unified Payments Interface ecosystem is expected to provide protection for millions of digital payment users.

The initiative represents a significant advancement in inter-agency collaboration between telecommunications and banking regulators, establishing a technology-driven framework for national cybersecurity coordination.

The DoT has indicated its commitment to expanding this cooperative model with RBI-regulated institutions to enhance alert mechanisms, accelerate fraud detection capabilities, and integrate telecommunications intelligence directly into banking operations.

As more financial institutions incorporate FRI into their systems, the technology is positioned to become an industry standard for real-time fraud prevention, strengthening digital trust and enhancing the resilience of India's digital financial infrastructure in alignment with the Government's Digital India initiative.

(KNN Bureau)

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