DoT launches 'Financial Fraud Risk Indicator' to curb cybercrime in digital payments

The Department of Telecommunications (DoT) has introduced the Financial Fraud Risk Indicator (FRI) in an effort to counter rising cyber fraud in India's booming digital payments space. This tool, part of the Digital Intelligence Platform (DIP), enables early detection and prevention of fraudulent activities by sharing real-time intelligence with banks, UPI platforms, and other financial institutions.

Launched on 21 May 2025, the FRI classifies mobile numbers into Medium, High, or Very High financial fraud risk categories. These classifications are derived from inputs provided by multiple sources, including the National Cybercrime Reporting Portal (NCRP), DoT’s Chakshu platform, and intelligence gathered from banks and NBFCs. The goal is to help stakeholders take preventive measures before fraudulent transactions occur.

The system enables instant communication of risk levels to all concerned parties. If a mobile number is identified as suspicious, it undergoes rapid, multi-dimensional analysis, and its risk category is shared via DIP. This allows banks and UPI service providers to take prompt action, such as declining transactions or issuing user warnings.

DoT’s Digital Intelligence Unit also regularly shares a Mobile Number Revocation List (MNRL) that flags numbers previously used in cybercrime or disconnected due to failed verification. As mobile numbers used in fraud often remain active for only a few days, timely risk identification becomes critical in stopping fraudulent transactions before they happen.

PhonePe is among the first to integrate FRI into its system. It now blocks transactions involving mobile numbers flagged with a Very High risk rating and alerts users via its PhonePe Protect feature. For numbers marked Medium risk, the platform is testing proactive warning messages before processing payments. The results, according to data from PhonePe, show high accuracy in predicting fraudulent activity.

Other major UPI platforms, including Paytm and Google Pay, which together with PhonePe handle over 90% of UPI traffic, are also implementing DIP alerts. Some platforms have introduced transaction delays and additional user confirmation steps to enhance protection. Several banks have begun using FRI data to strengthen their cyber fraud detection mechanisms.

As UPI continues to dominate digital payments across the country, this initiative is poised to protect millions from falling victim to cyber scams. The DoT plans to expand collaboration with financial entities to refine alert mechanisms, aiming to establish FRI as a new industry standard in cyber risk management.