Why in news?
The Department of Telecommunications (DoT) reported that its Financial Fraud Risk Indicator (FRI) system has prevented an estimated ₹660 crore in fraud losses within six months of its rollout. The tool, launched in May 2025, analyses risk signals associated with mobile numbers and helps banks and payment platforms block suspicious transactions before they occur.
Background
Rising cases of online banking and UPI fraud have led regulators to explore proactive measures. The DoT’s Digital Intelligence Unit developed the FRI as part of the Sanchar Saathi initiative. It works like a “risk thermometer” for mobile numbers. Using inputs from the Integrated Cyber Crime Coordination Centre’s National Cybercrime Reporting Portal, DoT’s Chakshu platform and intelligence from banks, the system classifies numbers as medium risk, high risk or very high risk.
How the FRI works
- Data aggregation: Reports of fraud from citizens, telecom operators and law‑enforcement agencies are collated. Banks and payment service providers contribute information about suspicious phone numbers used in fraudulent transactions.
- Risk scoring: Each mobile number receives a dynamic risk score based on the volume and type of complaints. Numbers frequently reported for scam calls, phishing or illegal activities move into higher‑risk categories.
- Real‑time alerts: When a bank or payment app sees an outgoing transaction linked to a flagged number, it can display a warning or halt the transaction. This allows interventions before money is transferred to fraudsters.
- Revocation list: The DoT circulates a mobile‑number revocation list so that telecom operators can deactivate numbers involved in fraud and re‑issue them only after a cooling‑off period.
- Industry adoption: Major banks and fintech firms such as PNB, HDFC Bank, ICICI Bank, Paytm and PhonePe have integrated FRI into their systems. The tool’s success depends on wide participation and continuous data sharing.
Significance
- Prevention over detection: Traditional approaches often rely on investigating fraud after the money is stolen. FRI enables banks to act before a scammer receives funds.
- Boosts confidence: By reducing fraud, the system helps build trust in digital payments, benefiting small merchants and consumers.
- Collaborative approach: The initiative brings together government agencies, telecom operators, banks and citizens. Crowd‑sourced reporting via the Sanchar Saathi portal empowers users to help fight fraud.
- Scalable framework: As more platforms adopt FRI, the system can expand to include other identifiers like emails or device IDs, providing a comprehensive fraud‑prevention ecosystem.
Source: ET
