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The tool is intended to improve data sharing between the Department of Telecommunications (DoT), banks, and Unified Payment Interface (UPI) platforms in a bid to tackle digital payment fraud.
The Financial Fraud Risk Indicator (FRI) is designed to alert banks, UPI service providers and financial institutions about mobile numbers associated with high risk of financial fraud.
“DoT is committed to prevent misuse of telecom resources by implementing national level technology driven solutions and collaborating with stakeholders, thus ensuring a secure and safe telecom ecosystem for all citizens,” the government department said in a press release.
“DoT continues to engage with financial institutions and digital payment platforms to further optimize alert mechanisms and reduce response time.”
Developed under the DoT’s Digital Intelligence Platform (DIP), the FRI provides real-time, risk-based alerts that classify mobile numbers as medium, high or very high risk.
These assessments are based on intelligence gathered from multiple sources, including the National Cybercrime Reporting Portal (NCRP), the DoT’s own Chakshu platform, and data that has been shared by banks and law enforcement.
With UPI being India’s most popular payment method, accounting for billions of transactions monthly, officials say the FRI tool could prevent large-scale losses and protect millions of users from falling victim to scams.
How the process works
Once a mobile number is flagged by any stakeholder as suspicious, it undergoes a multi-dimensional analysis via DIP. If it is found to be linked with cybercrime activity, such as SIM swap fraud, phishing or mule accounts, the number is subsequently assigned a risk level and immediately shared with financial partners.
This early warning mechanism allows institutions to delay, block and/or flag transactions associated with those numbers.
The tool also builds on the Mobile Number Revocation List (MNRL), a dataset of numbers previously disconnected for reasons such as cybercrime involvement or verification failures.
Digital payment leaders such as PhonePe, Paytm and Google Pay, which collectively handle more than 90 percent of India’s UPI volume, have begun integrating FRI alerts into their platforms.
PhonePe, one of the early adopters, has used FRI to automatically decline transactions linked to very high-risk numbers, displaying real-time on-screen alerts as part of its PhonePe Protect feature. The company reports a high correlation between the flagged numbers and actual fraud incidents.
Medium-risk numbers trigger a proactive user warning, and some UPI platforms have also introduced transaction delays and extra confirmation steps for users when risk indicators are present.
Banks and non-bank financial companies (NBFCs) are also actively using FRI data to enhance internal fraud monitoring and risk profiling.
The DoT said it remains committed to expanding its partnership network and improving fraud response time through automation and deeper integration with frontline payment platforms.
The FRI rollout marks another milestone in India’s broader effort to combat cybercrime, following initiatives such as the Chakshu citizen alert system and increased cooperation with the Indian Cybercrime Coordination Centre (I4C).
“The integration of FRI into customer-facing systems is expected to become an industry standard, bringing systemic resilience to India’s digital financial ecosystem.”
A move reflecting global regulatory changes
The desire for greater information sharing among financial institutions has become a key feature in jurisdictions around the world in recent years.
In Europe, advocates in both the UK and EU are keen to see more information sharing, and it is thought that governments are also in favour.
This is reflected in regulatory changes such as the EU’s Payment Services Regulation (PSR), which will pave the way for adjustments to the General Data Protection Regulation.
In the UK, the Information Commissioner’s Office has made a number of recent interventions and said in November 2024 that “data protection is not an excuse when tackling scams and fraud”.
The DoT’s introduction of the FRI tool is a significant policy development in the fight against cyber fraud and should benefit India’s innovative payments scene, which has become the envy of the world, given UPI’s huge uptake.
The tool has the potential to drive industry standardisation, especially if it proves successful and popular. If widely adopted, it could become the benchmark for mobile number risk assessment across India’s payments landscape, establishing a new standard in digital security.
In addition, it fosters enhanced inter-agency coordination and strengthens the collaboration between telecom operators, cybercrime units and financial regulators, which should create a unified defence mechanism.
The tool supports faster and more efficient intelligence sharing and should improve response times to potential threats, as well as increasing consumer trust.
There will be some challenges along the way. For example, false positives may see legitimate users wrongly flagged, leading to declined or delayed transactions.
There is also the risk that ratings may be opaque to users, raising concerns about due process, appeal mechanisms, or redress if someone is wrongly classified. This could cause criticism about warranty if classification is not made visible to the public.
For now, however, FRI can be seen as offering an effective challenge to fraud on India’s instant payments network.
