RBI directs banks to integrate DoT’s Financial Fraud Risk Indicator into their systems

Reserve Bank of India (RBI) has directed all financial intermediaries, including 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.

The development, the first for RBI and the banking system is intended to fight cyber frauds in the financial system through inter-agency collaboration and safeguard the reliability of India’s growing digital economy. 

By automating data exchange between banks and DoT's Digital Intelligence Platform (DIP) through API-based integration, financial institutions will be able to respond to financial threats on a real-time basis, thereby also refining response through continuous feedback and system updates, according to DoT.

DoT’s Financial Risk Indicator (FRI) is a mobile number-based risk assessment metric that classifies mobile numbers on the basis of association with cyber crimes. The risk assessment is based on inputs received from financial institutions and agencies dealing with digital frauds, invcluding Indian Cyber Crime Coordination Centre (I4C’s) National Cybercrime Reporting Portal (NCRP) and DoT’s Chakshu platform.

DoT’s Digital Intelligence Unit (DIU) classifies a mobile number on the basis of their association with medium, high, or very high levels of financial frauds. 

This classification helps banks, NBFCs, and UPI service providers to undertake additional customer protection measures on the basis of mobile numbers. DIU shares Mobile Number Revocation List (MNRL) with stakeholders on a regular basis, detailing information on disconnections due to cybercrime links, failed re-verification, or misuse.

FRI allows financial institutions to decline suspicious transactions, issue alerts or warnings to customers, and delay transactions by assessing associated risks. The system is already in use by financial institutions such as PhonePe, Punjab National Bank, HDFC Bank, ICICI Bank, Paytm, and India Post Payments Bank, according to DoT.