Financial Fraud Risk Indicator: DoT’s Alert System To Help Banks And UPI Apps Catch Fraud In Real Time —Explained

In a major technological move to fight cyber fraud, the Department of Telecommunications (DoT) has rolled out the Financial Fraud Risk Indicator (FRI)—a real-time alert mechanism developed under its Digital Intelligence Platform (DIP).

This new tool is designed to help banks, non-banking financial companies (NBFCs), and UPI apps detect and prevent fraud by flagging suspicious mobile numbers before transactions take place.

Union Telecom Minister Jyotiraditya Scindia has termed the initiative as India's "big leap towards fighting cyber fraud".

"Introducing India's Kawach against fraudulent payments! In a big leap towards fighting cyber fraud, my team at DoT has introduced the Financial Fraud Risk Indicator (FRI) — a tech-driven analytical tool for real-time fraud detection and prevention. FRI will empower banks, UPI service providers & financial institutions with actionable intelligence, helping flag risky mobile numbers before digital payments are made," Scindia said.

"With UPI as India’s most preferred payment mode, this initiative will safeguard millions and strengthen trust in our digital ecosystem. Congratulations to all our stakeholders for this pivotal step in securing our digital economy!" he added.

What Is FRI?

FRI is a risk-based classification metric that labels mobile numbers as Medium, High, or Very High risk for financial fraud. The analysis draws on data from the National Cybercrime Reporting Portal (NCRP) under the I4C, DoT’s Chakshu platform, and inputs from banks and financial institutions.

The tool instantly shares this risk rating with all stakeholders, enabling them to apply advanced validation checks.

Why It Matters

Cybercriminals typically misuse mobile numbers for only a few days before they are deactivated or re-verified.

The FRI fills this gap by acting as an early-warning system—flagging suspect numbers even before full verification concludes.

Once flagged, a mobile number undergoes multi-dimensional analytics and the results are immediately shared with financial entities through the DIP system.

DoT’s Digital Intelligence Unit (DIU) has already been issuing Mobile Number Revocation Lists (MNRL) containing numbers disconnected due to cybercrime, re-verification failure, or exceeding user limits.

Now, with FRI, the response moves from reactive to proactive fraud prevention.

Real-World Deployment: PhonePe Leads The Way

PhonePe is among the first platforms to operationalize FRI. It uses the indicator to block payments to numbers marked as Very High risk and display an on-screen alert as part of PhonePe Protect feature.

Internal data from PhonePe shows a strong correlation between flagged numbers and actual cyber fraud involvement.

The platform is also working to introduce transaction warnings for Medium-risk cases.

Industry-Wide Adoption Underway

With over 90 per cent of UPI transactions handled by PhonePe, Paytm, and Google Pay, integration of FRI across these platforms could revolutionise fraud prevention. Measures underway include:

• Transaction delays with additional alerts and user confirmations.

• Integration by banks to prioritise alerts and enhance response.

This systemic effort ensures that fraud-prone mobile numbers are neutralized before any harm occurs—directly protecting users at the point of transaction.

"With UPI being the most preferred payment method across India, this intervention could save millions of citizens from falling prey to cyber fraud. The FRI allows for swift, targeted, and collaborative action against suspected frauds in both telecom and financial domains," the DoT said in a release.

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