CURRENT AFFAIRS
CURRENT AFFAIRS
Description
In a strategic move to strengthen the digital financial ecosystem and combat rising instances of online fraud, the Reserve Bank of India (RBI) has issued a directive to all Scheduled Commercial Banks, Small Finance Banks, Payments Banks, and Co-operative Banks to adopt the Financial Fraud Risk Indicator (FRI) developed by the Department of Telecommunications (DoT). This initiative marks a significant step forward in ensuring real-time detection and prevention of financial frauds across India’s banking and digital payment landscape.
About Financial Fraud Risk Indicator (FRI)
The Financial Fraud Risk Indicator (FRI) is a risk-assessment tool introduced by the Digital Intelligence Unit (DIU) under the Department of Telecommunications (DoT). It is designed to evaluate and classify mobile numbers based on their potential risk of involvement in financial fraud. Each mobile number is assigned a risk rating categorized as Medium, High, or Very High allowing financial institutions to take proactive measures when handling potentially fraudulent transactions.
FRI Works
The classification system used by the FRI is powered by inputs gathered from multiple authoritative sources, including:
Reports submitted via the National Cybercrime Reporting Portal (NCRP) operated by the Indian Cyber Crime Coordination Centre (I4C)
Complaints and data flagged on DoT’s Chakshu platform
Intelligence inputs from banks, NBFCs, and UPI service providers
These data streams are analyzed and synthesized to determine the level of risk associated with specific mobile numbers. The outcome is a dynamic, constantly updated risk profile that financial institutions can access to make informed decisions in real-time.
Key Features And Benefits
Real-Time Risk Assessment: Enables immediate evaluation of mobile numbers during transactions.
Fraud Prevention: Helps banks and UPI platforms prevent fraud by rejecting or delaying high-risk transactions.
Proactive Alerts: Institutions can alert users when a transaction involves a mobile number flagged as high risk.
Customer Protection: Promotes safer banking by identifying and isolating numbers previously involved in cyber frauds.
Enhanced Due Diligence: Encourages more rigorous scrutiny of mobile-linked financial operations.
Use Of Mobile Number Revocation List (MNRL)
The Digital Intelligence Unit (DIU) also maintains and shares a Mobile Number Revocation List (MNRL) with registered stakeholders. This list contains numbers that have been:
Disconnected due to confirmed links with cybercrime
Deactivated after failed KYC or re-verification
Misused in financial scams and phishing attempts
Banks and payment platforms can cross-reference the MNRL to block interactions with compromised numbers, thereby reducing exposure to known threats.
Widespread Adoption And Implementation
The effectiveness of the FRI has already been proven, with several leading institutions actively integrating the system into their operational frameworks. These include:
HDFC Bank
ICICI Bank
Punjab National Bank
India Post Payments Bank
PhonePe
Paytm
These organizations are leveraging the FRI to enhance fraud detection capabilities and protect customers from digital financial crimes.
Strategic Importance
With India witnessing a surge in digital transactions through platforms like UPI, net banking, and mobile wallets, there is an urgent need for robust cybersecurity infrastructure. The FRI fills this gap by offering a collaborative, data-driven approach to fraud detection that bridges the telecommunications and financial sectors.
By mandating its integration, the RBI aims to promote a cohesive, risk-mitigated ecosystem where suspicious activities are flagged before harm is done. This real-time intelligence-based strategy aligns with the government’s broader goals under Digital India and enhances trust in digital payments.
Conclusion
The Financial Fraud Risk Indicator represents a pioneering step in India’s ongoing efforts to secure digital financial transactions. Through enhanced vigilance, cross-sectoral collaboration, and advanced analytics, the FRI promises to reshape how banks and financial entities respond to cyber threats proactively and in real time.
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