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FRAUD RISK INDICATOR (FRI)

07 Aug 2025 GS 2 Govt schemes & initiatives
FRAUD RISK INDICATOR (FRI) Click to view full image

FRI: DoT’s New Digital Tool to Combat Financial Fraud

What is the Fraud Risk Indicator (FRI)?

  • A risk-based metric developed by the Department of Telecommunications (DoT) under the Digital Intelligence Unit (DIU) project.

  • FRI classifies mobile numbers based on financial fraud risk levels:

    • Medium Risk

    • High Risk

    • Very High Risk

Purpose and Significance

  • Helps prevent the misuse of telecom resources for financial fraud and cybercrime.

  • Enables stakeholders to take proactive customer protection actions.

Key Stakeholders Using FRI

  • Banks

  • Non-Banking Financial Companies (NBFCs)

  • Unified Payments Interface (UPI) service providers

  • Payment Service Operators (PSOs)

Accessed through the Digital Intelligence Platform (DIP).

Regulatory Support and Action

  • Reserve Bank of India (RBI) has issued advisories for:

    • Integration of FRI into banking and UPI systems.

    • Adoption of real-time response protocols, such as:

      • Alerts

      • Transaction delays

      • Transaction decline

      • Warnings and red flags

About Digital Intelligence Unit (DIU) Project

  • Launched by DoT to combat cyber fraud and financial crime via telecom networks.

  •  Objective is to devise systems to curb misuse of telecom resources for cybercrime and financial frauds.

  • FRI and DIP are core components.

  • Budget: ₹228.16 crore

  • Duration: 5 years

DoT has developed an online secure Digital Intelligence Platform (DIP) under Digital Intelligence Unit (DIU) Project for sharing information related to misuse of telecom resources among the stakeholders on near real time basis for prevention of cyber-crime and financial frauds. 

Different stakeholders are being onboarded on it including Ministry of Home Affairs (MHA), law enforcement agencies, RBI, banks, financial institutions (FIs), GSTN, UIDAI and social media platforms. 32 States/UTs police, Securities Exchange Board of India (SEBI), National Payment Corporation of India (NPCI) have on boarded this platform during Jul-Aug 2024.

Broader Implications

For Financial Institutions

  • Enables risk-based KYC enhancement.

  • Strengthens anti-fraud detection and response.

For Customers

  • Adds a layer of protection in real-time digital transactions.

  • Reduces the risk of falling prey to SIM swap scams, phishing, OTP frauds, etc.

For National Security

  • Strengthens India’s cybersecurity posture in the financial digital ecosystem.

  • Ensures inter-agency coordination via centralised fraud risk intelligence.

Challenges and Way Forward

  • Need for uniform adoption across all financial institutions, including smaller NBFCs and digital wallet providers.

  • Ensure privacy protection and transparency in how risk is calculated.

  • Strengthen real-time data sharing protocols across platforms.

  • Combine with AI-based fraud prediction tools and telecom-data analytics.



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