RBI mandates adoption of DoT’s telecom-based fraud detection system - Trade Treasury Payments

The Reserve Bank of India (RBI) has directed all banks to integrate the Department of Telecommunications’ (DoT) Financial Fraud Risk Indicator (FRI) into their operational systems. 

Developed by DoT’s Digital Intelligence Unit, FRI provides real-time risk categorisation of mobile numbers based on their association with financial fraud. The system draws on inputs from multiple sources, including the National Cybercrime Reporting Portal, the Chakshu citizen reporting platform, and bank-submitted complaints. Risk scores are assigned at three levels (Medium, High, and Very High) enabling financial institutions to assess the fraud potential of a number during a transaction.

Banks will access the FRI system through an API-based connection to the DoT’s Digital Intelligence Platform, allowing for automated responses such as transaction alerts, holds, or rejections when high-risk numbers are detected.

The RBI’s instruction applies to all categories of banks under its supervision, including scheduled commercial banks, small finance banks, payments banks, and co-operative banks. According to DoT, several private-sector banks and payment platforms (including HDFC Bank, ICICI Bank, PhonePe, and Paytm) have already adopted the FRI framework on a pilot basis.

According to the central bank’s latest data, total fraud value in the banking system nearly tripled, reaching ₹36,014 crore (around $4.2 million USD) in FY2024-25, up from ₹12,230 crore (around $1.4 million USD) crore the previous year.

In public statements earlier this year, RBI officials had emphasised the need for banks to tighten cybersecurity measures and adopt data-driven tools to improve monitoring of digital transaction flows and third-party exposure. According to DoT, wider adoption of FRI will contribute to sector-wide standardisation and improve the resilience of India’s digital banking infrastructure.