RBI Mandates Banks to Use DoT Tool in Fight Against Cyber Frauds

The RBI has instructed banks and payment institutions to incorporate the telecom department's (DoT) financial fraud risk indicator (FRI) into their systems in light of the increasing number of cybercrimes.

The RBI guideline, released on June 30, seeks to use cutting-edge technologies to combat cybercrime. The DoT hailed the action as a turning point. In a statement, the DoT claimed that the RBI's directives mark a turning point in the battle against financial crimes made possible by cyberspace and demonstrate the effectiveness of interagency cooperation in protecting individuals in India's expanding digital economy.

FRI is a risk-based statistic that was introduced in May and links a cellphone number to the level of financial fraud. Data from DoT's Chakshu platform, the government's cybercrime reporting portal, and information provided by banks and financial organisations are used to highlight the numbers.

This makes it possible for the appropriate parties to take further consumer protection steps to stop financial frauds committed using high-risk mobile numbers.

Real-time FRI allows banks and other financial institutions to take preventative steps like rejecting suspicious transactions, warning or alerting clients, and postponing high-risk transactions.

FRI Already Deployed on Fintech Platforms

Real-time response and ongoing feedback to improve the fraud risk models are made possible by an API-based platform that automates data interchange between banks and DoT's digital intelligence platform, which has created FRI.

 According to the DoT, the platform has already been implemented in banks like HDFC Bank and ICICI Bank as well as fintech companies like PhonePe and Paytm.

The DoT went on to say that as UPI is the most widely used payment mechanism in India, this action may prevent millions of people from being victims of cybercrime. The FRI makes it possible to take prompt, focused, and cooperative action against suspected frauds in the banking and telecommunications meantime, it has sectors.

In the been claimed that the National Quantum Mission (NQM) is creating a task force to help banks implement the new technology for data analysis, financial modelling, and cybersecurity. The task force will assist banks in creating rules for the shift to quantum technologies, according to a media source.

A draft of these standards is expected to be made public in the coming months following government approval. One of NQM's initial milestones, a long-distance quantum key distribution (QKD) network, is anticipated to be completed by the end of July or the beginning of August, the article also stated.

Cybercrime on the Rise in India

Indians lost INR 1,935.51 Cr to digital arrest frauds in 2024, Bandi Sanjay Kumar, the minister of state (MoS) for home affairs, said in the Parliament earlier this year. He added that in the first nine months of FY25, cyber frauds cost INR 107.21 Cr.

According to reports, the Centre has shut thousands of WhatsApp accounts used to spread online fraud, along with lakhs of SIM cards and IMEIs (International Mobile Equipment Identity).