New telecom tool assesses mobile number risk to prevent financial fraud

New Delhi: The Department of Telecommunications (DoT) has introduced a new tool, the Financial Fraud Risk Indicator (FRI), to help financial institutions and law enforcement agencies combat the rising tide of digital scams. The metric, which is available to stakeholders through the Digital Intelligence Platform (DIP), classifies a mobile number's potential for financial fraud as Medium, High, or Very High risk.

This information was provided on Wednesday in a written reply to a question in the Lok Sabha by the Minister of State for Communications and Rural Development, Dr Pemmasani Chandra Sekhar. 

What is Financial Fraud Risk Indicator?

The FRI is designed to empower banks, Non-Banking Financial Companies (NBFCs), and UPI service providers to prioritise enforcement actions and implement additional customer protection measures for high-risk numbers.

The DoT's new tool is a key component of its larger Digital Intelligence Unit (DIU) project, a five-year initiative with a budget of over Rs 228 crore aimed at curbing the misuse of telecom resources for cybercrime.

In response to the FRI's implementation, the Reserve Bank of India (RBI) has issued advisories to banks and Payment Service Operators (PSOs).

These advisories urge them to integrate the FRI into their systems and adopt real-time response protocols, such as issuing alerts, delaying transactions, or even declining them, based on the risk level of a mobile number.

FRI in action

The new system has already yielded significant results. According to Action Taken Reports (ATRs) submitted on the DIP, 34 banks, financial institutions, and UPI providers have taken action against fraudulent activity.

This includes freezing more than 10 lakh bank accounts and payment wallets and placing debit/credit restrictions on over 3 lakh accounts.