Why in the News?

The Department of Telecommunications has reported that the Financial Fraud Risk Indicator (FRI) has prevented potential losses of about ₹660 crore across the banking ecosystem within six months of its rollout.

What is Financial Fraud Risk Indicator (FRI)?

• A risk based early warning system to detect financial fraud
• Launched in May 2025
• Developed by the Digital Intelligence Unit
• Classifies mobile numbers based on likelihood of financial fraud

Risk Categories Under FRI

• Medium Risk
• High Risk
• Very High Risk

Data Sources Used for Classification

• Indian Cybercrime Coordination Centre via National Cybercrime Reporting Portal
• DoT’s Chakshu platform
• Intelligence shared by banks and financial institutions

How FRI Works

• Suspected mobile number is flagged by any stakeholder
• Number undergoes multidimensional risk analysis
• Classified into Medium, High, or Very High fraud risk
• Risk status shared instantly with stakeholders through DoT’s Digital Intelligence Platform (DIP)

Role of Mobile Number Revocation List (MNRL)

• Issued regularly by DoT’s Digital Intelligence Unit
• Contains numbers disconnected due to:
• Cybercrime involvement
• Failed verification
• Exceeding permissible usage limits
• Such numbers are frequently reused for financial fraud

Why FRI is Effective?

• Fraudulent numbers are often short lived
• Traditional verification takes time
• FRI provides preemptive risk signalling before losses occur

Use by Banks and Financial Institutions

• Decline suspicious transactions
• Delay high risk transactions
• Send alerts and warnings to customers
• Strengthen UPI and digital payment security

Prelims Pointers

• FRI is a preventive tool, not a law enforcement mechanism
• Operates in real time
• Enhances coordination between telecom and financial sectors
• Supports secure digital payments ecosystem

Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

Attend Now