RBI Deploys Real-Time Fraud Detection Tool to Safeguard Digital Banking

The Reserve Bank of India recently mandated all banks to implement a Financial Fraud Risk Indicator (FRI) system that flags suspicious transactions in real time. Developed in collaboration with the Department of Telecommunications, the FRI tool automatically identifies phone numbers associated with reported fraud and blocks or flags transactions originating from them. The move is aimed at curbing the sharp rise in cyber-enabled financial crime and protecting the integrity of India’s rapidly digitizing banking system.

This step comes as digital transactions continue to boom, with mobile banking, UPI, and wallet transactions setting new records. However, the speed of digitization has also exposed gaps in real-time fraud monitoring. The FRI tool seeks to close this gap by integrating telecom and financial data streams to detect anomalies at the point of transaction. For banks, this raises the bar on compliance and operational readiness, requiring investments in real-time analytics and fraud response teams. For customers, it means enhanced security in everyday payments, potentially boosting confidence in India’s use-as-currency systems.